Friend of our site


MMA Headlines


UFC HP


Josh Gross


MMA Fighting


MMA Torch


Sherdog (News)


Sherdog (Articles)


Lowkick


Liver Kick


Fightsport Asia


Caged In


MMA Junkie


MMA Mania


Bloody Elbow


Fightlinker


Fightnomics


MMA Ratings


Rating Fights


Infinite MMA


MMA Convert


Fightline


Fight Medicine


CompuBox


CompuStrike


MMA Frenzy


Ult MMA


Fighters


Kevin Iole


Yahoo MMA Blog


MMA Betting


Search this site



Latest Articles


News Corner


MMA Rising


MMA Chronicle


David Williams


Audio Corner


Oddscast


MMA Dude Bro


Sherdog Radio


Joe Ferraro


The Fightworks Podcast


Eddie Goldman


Pro MMA Radio


MMA Torch


Video Corner


Fight Hub


The Fight Nerd


Special thanks to...

Link Rolodex

Site Index


To access our list of posting topics and archives, click here.

Friend of our site


Buy and sell MMA photos at MMA Prints

Site feedback


Fox Sports: "Zach Arnold's Fight Opinion site is one of the best spots on the Web for thought-provoking MMA pieces."

Site Meter

« | Home | »

Fishman Companies vs. DSE

By Zach Arnold | March 20, 2007

Print Friendly and PDF

By Zach Arnold

Fishman Companies (Ed Fishman), through attorneys at Brownstein Hyatt Farber Shreck P.C., filed a lawsuit in Clark County, Nevada on Monday against Dream Stage Entertainment Inc., Dream Stage Entertainment (Japanese branch), and “does i-x.” The “does i-x” is a generic term for unknown individuals related to PRIDE that the court can later amend to name publicly once identities are verified and ascertained.

In short, the lawsuit from Fishman Companies alleges five causes of action:

  1. Breach of contract
  2. Breach of the covenant of good faith and fair dealing
  3. Unjust enrichment
  4. Quantum meruit
  5. Anticipatory repudiation

History (according to the Fishman Companies legal complaint)

DSE signed a three year contract with Fishman Companies on April 7th, 2006. Fishman Companies had a two-year option at the end of the deal to sign if they wanted to make it a 5-year contract in total length. The deal states that Fishman Companies would be paid an annual consulting fee of $200,000 USD/year by DSE. Therefore, a five-year contract life would result in a payment of $1 million USD to Fishman Companies. The consulting deal also gave Fishman Companies 10% of the revenue from tickets sold per each PRIDE US event.

The complaint states that Fishman Companies was not paid 10% of the ticket sales for both the 10/21/2006 and 2/24/2007 Thomas & Mack Center events in Las Vegas, Nevada. Based on the gate of $2,033,098 USD for the 2/24 show, Fishman Companies believes it is owed $203,309.80 USD. FC wrote a note to DSE on 2/27 with a deadline of March 7th for payment of money owed to FC. The complaint says that Fishman Companies did not receive any money or written assurances that money would be paid. Money was owed no later than 4/7/2007 (a year to the date of the contract signed), and Fishman Companies sent out the note to DSE ahead of schedule.

The lawsuit by Fishman Companies is filed under the following conditions:

The damages are in excess of $10,000 USD, a recovery of all reasonable costs and attorney fees (court costs), any legal interest rate on money owed in the pre and post judgment figures, and any additional relief the court deems just and proper based on evidence presented at trial.

Summary

Fishman Companies is seeking $10 million USD based on the following:

  1. $200,000 USD/year consulting fee (worldwide) at 5 years, totalling $1 million USD
  2. $9 million USD based on the 5-year life of the contract with PRIDE in which Nobuyuki Sakakibara presented a business plan outlining six PRIDE events in the US per year with a projection of $3-4 million USD gates per show, giving Fishman Companies roughly $1.8 million USD for each of the five years)

Topics: All Topics, Japan, MMA, Media, PRIDE, Zach Arnold | 28 Comments » | Permalink | Trackback |

28 Responses to “Fishman Companies vs. DSE”

  1. The Gaijin says:

    This should be interesting.

  2. Fan Futbol says:

    I’d like to read the actual complaint (I’m an attorney), but based on Zach’s summary, Fishman’s suit is a fairly small (and straightforward) breach of contract claim. It is unlikely to serve as any sort of obstacle to the Fertittas’ reported purchase of Pride.

    Fan Futbol

  3. Zach Arnold says:

    All pertinent details from the complaint are listed up above. I did my best not to skip over anything.

  4. Too bad it’ll probably get settled privately. I’m gonna assume 2 mil payment and some kind of show deal

  5. Jonathan says:

    I am just thinking that he does not want to buy Pride because either he thinks or knows that it has already been sold? This is just a thought that I had.

    Also, how quickly do things go south between he and Pride. Maybe we are realizing that with this deal and the lawsuit between the WFA and their old President that you cannot simply bring in someone to look run your company…it has to come from within.

  6. David says:

    Does the “does i-x” thing mean that we will finally find out who Pride’s mystery owner is?

  7. Zach Arnold says:

    Does the “does i-x” thing mean that we will finally find out who Pride’s mystery owner is?

    In short, it certainly could.

    I know this will floor all of you – but you’ll be shocked… shocked… that Loretta Hunt and Josh Gross have now just posted on this story (a few hours after this post), pretty much indicating either them sharing a source or at least everyone (the writers) is talking with each other right now.

  8. The Gaijin says:

    Fan Futbol:

    I’m finishing up law school right now…I agree, this looks to be a pretty simple, straightforward contract claim (and from what Zach says – surprisingly this is the whole thing) and really shouldn’t create too much of a hurdle for selling to Zuffa. I’m sure they’re corporate lawyers have dealt with far more complex issues.

    I’m interested to see what DSE’s Statement of Defence (and possible Counterclaims) will look like…

    FF: just out of interest – what area of law are you practicing?

  9. Zach Arnold says:

    I’m finishing up law school right now…I agree, this looks to be a pretty simple, straightforward contract claim (and from what Zach says – surprisingly this is the whole thing) and really shouldn’t create too much of a hurdle for selling to Zuffa. I’m sure they’re corporate lawyers have dealt with far more complex issues.

    If the Fertittas do a clean asset buy of PRIDE, then this lawsuit likely doesn’t impede on them. However, if Fishman tries to get an attachment on the sale and drags this process out in court — that’s when things could get interesting (in the sense of who he did business with, putting people under oath to testify, revealing any skeletons in the closet, etc.)

  10. The Gaijin says:

    Zach:
    Definately – I wasn’t trying to discount your analysis of it and say mine was any more correct than yours. I just meant to say his claims seem to be very cut and dried and his SofC was a lot less complicated than I expected it to be. (i.e. The lawsuit against Courtney Love for $$ owed for a rehab stint had a SofC that was something like 12 pages long.)

    I think this does have potential to pull some of the “shadowy figures” out of the dark corners of PRIDE’s business dealings, if it goes down the avenue you seem to think it might.

  11. Fan Futbol says:

    Gaijin:

    I’m a plaintiff’s lawyer. I do commercial torts (although breach of contract isn’t a tort claim, it’s present in most commercial disputes), securities, and wrongful death.

    No matter what Fishman does, I don’t see legally how he can stop the deal. His beef is with Pride, not the Fertittas (unless they acquire DSE’s stock), and Pride is going to be on the receiving end of $65m. So it’s not like he even has an equitable claim along the lines of hey, judge, let’s involve the purchaser (Fertittas) in the lawsuit because my claim against the seller (DSE) will never be satisfied as they gave away their crown jewel assets for nothing. Those claims are very hard to win under any circumstances, and even more so when we’re talking about a $10m claim in the context of a deal with $65m in proceeds.

    I also don’t see why the figher contracts aren’t enforceable in the U.S. U.S. courts can and do enforce contracts governed by foreign law all the time. What’s more likely is that the fighters may have something called “no assignment” clauses in the contract, which essentially voids the contract (or entitles the fighter to a payout) if the “owner” of the contract (DSE) is (a) acquired or (b) sells its fighter contracts to another promotion.

    I’ll stop boring everyone to tears with legal talk now.

    FF

  12. The Gaijin says:

    I’d also imagine if it looks like there’s going to be a strong move by Fishman in any way with regards to the sale that the Fertitta’s will just walk away from their “proposed transaction”. Then they’d either forget it completely or they’ll just pick the bones of whatever’s left after Fishman gets his pound of flesh and drags DSE through the ringer.

    For someone who has any idea about international business law etc…what’s the chance that there’s really any jurisdiction for the Court in the US to have the Japanese boys in court in this case? Wouldn’t they be primarily dealing with all the people in PRIDE USA’s offices and not necessarily anyone from PRIDE/DSE in Japan? There’s nothing saying that the courts wont decide that the only proper parties are people from PRIDE USA.

  13. Zach Arnold says:

    What’s more likely is that the fighters may have something called “no assignment” clauses in the contract, which essentially voids the contract (or entitles the fighter to a payout) if the “owner” of the contract (DSE) is (a) acquired or (b) sells its fighter contracts to another promotion.

    For the record, I have not seen a PRIDE contract with my own eyes. However, the point you bring up is the one that I have heard from someone who has seen a PRIDE fighter contract before (the claim being that it’s a personal services contract with the “no assignment” clause).

    In addition to this contract item, I am also very curious in regards to what drug-related issues are expressed (i.e. permission of taking steroids/HGH) and what is not stated.

    We’ve seen past fighters (like Bob Sapp) try to fight out of their Japanese fight contracts before, so this is not by any stretch something that should be dismissed immediately.

  14. Zach Arnold says:

    For someone who has any idea about international business law etc…what’s the chance that there’s really any jurisdiction for the Court in the US to have the Japanese boys in court in this case? Wouldn’t they be primarily dealing with all the people in PRIDE USA’s offices and not necessarily anyone from PRIDE/DSE in Japan? There’s nothing saying that the courts wont decide that the only proper parties are people from PRIDE USA.

    In the complaint, you have DSE Inc. (a Nevada corp) and DSE Japan listed. Let’s say for the sake of argument that the contract that Fishman signed was with the Inc. and also involved Sakakibara. You could immediately see a situation where Fishman could call up witnesses like Yukino Kanda, Hideki Yamamoto, Nobuyuki Sakakibara, etc. and make them testify under oath about transactions between the companies. As I addressed in the original post, Fishman’s claim for damages is based on a business plan proposed to him by Sakakibara himself. So obviously he would be called to testify by Fishman’s lawyers in court.

  15. Zach Arnold says:

    And now as of 10:18 PM PST, the Sherdog report about the Ed Fishman lawsuit has been yanked. And it’s back up 10 minutes later, edited and in longer format.

  16. TorontoMike says:

    It’ll be settled out of court like most cases are.

  17. The Gaijin says:

    FF: That’s pretty cool stuff…thanks for the synopsis as well – I found it to be very interesting.

    Zach: My question was just to the effect that in many cases (at least from my understanding, maybe FF can clear up any discrepancies) is that you just name as many possible parties as you can in your SofC in the first place, b/c its a lot easier to amend it to remove parties than it is to amend to add parties. And of course you’re going to want to add the parties who potentially have the biggest pockets. You’d know more about what the particulars of the agreements and claims were since you’ve read it…I was just musing that I wondered how many of the DSE Japan guys (re: “does i-x”) would ever really have to be involved. Outside of Sakikabara who had intimate knowledge of the contract – and I can’t really see Fishman being too interested in wasting his money on a fact finding mission to find out “who owns PRIDE” – when it would have little relevance to the claim he’s looking to prove.

  18. Harold says:

    “I know this will floor all of you – but you’ll be shocked… shocked… that Loretta Hunt and Josh Gross have now just posted on this story (a few hours after this post), pretty much indicating either them sharing a source or at least everyone (the writers) is talking with each other right now.

    how about the fact that they’re publically available legal documents?

  19. Mr1000Cent says:

    I bet “does i-x” is actually Dave Meltzer. Now that would be shocking :D .

  20. DarthMolen says:

    It would be even more shocking if it was Vince McMahon in the “does i-x” portion of the document :D :D

  21. fatso says:

    I find it rather interesting that http://www.pridefc.com is hosted by “Hollywood Interactive”, apparently a web hosting company based in Los Angles, California.

    It is also interesting that “Hollywood Interactive” shows up in many blocklists meant to protect people from malicious activities.

    fatso

  22. JThue says:

    You would think both Fishman, DSE and “the others” would go for a decent settlement long before considering to drag this all the way down into the dirt with revelations and such. We don’t need the next suicide to come from this, and Fishman is smart enough to get the money and get the hell out of dodge if that opportunity(settle) shows itself.

  23. [...] A major component of this story was PRIDE’s bumbling of trying to run shows in the U.S. market. They finally did, running two shows in the last five months, through U.S. promoter Ed Fishman. Then, they abruptly fired Fishman after he went public with wanting to buy the troubled company (for a reported 65 million dollars USD). Here is that coverage. [...]

  24. [...] notes from the latest legal proceedings this week in the Fishman Companies vs. DSE Inc. [...]

  25. [...] to a source with information related to the Fishman Companies vs. DSE Inc. lawsuit filed in Clark County, Nevada, Fishman Companies attorney Lawrence Semenza III (and staff) [...]

  26. [...] PRIDE, is in Las Vegas right now as Dream Stage Entertainment Inc. is preparing a defense against a lawsuit filed by former PRIDE USA President Ed Fishman. I’m sure Sakakibara and others associated with DSE [...]

  27. [...] update on the Fishman Companies vs. DSE Inc. lawsuit: On Wednesday, Fishman Companies filed a joint case conference report to the court (judge [...]

  28. [...] court records in Clark County, Nevada, an order of dismissal with prejudice was issued in the Fishman Companies vs. DSE Inc. lawsuit on July 25th (last Wednesday). In other words, a settlement has been reached and no further [...]

Comments

*
To prove you're a person (not a spam script), type the security word shown in the picture.
Anti-spam image