By Zach Arnold | May 23, 2007
By Zach Arnold
MMA Weekly has the latest twist in what is amounting to a complete implosion of Dream Stage Entertainment Inc. and the PRIDE asset sale.
According to sources, DSE requested that Pride fighters assign their contracts to â€œPride FC Worldwideâ€ (the new company created in the wake of Lorenzo and Frank Fertitta’s proposed buy-out of Pride), and most of the fighters refused to do so.
Read this paragraph carefully. If this information is accurate, it reflects positively upon what I have been arguing online for a couple of months now — that the deals PRIDE fighters had with DSE were personal service contracts. PSCs are usually not transferrable to third parties in asset sales. Meaning, if DSE sold the PRIDE assets to UFC, the PRIDE fighters would technically be free agents because the PSCs are not enforceable in court.
A class-action lawsuit by fighters against DSE Inc. in an American court is going to further complicate any sort of PRIDE asset sale agreement between DSE & UFC. Such a lawsuit would be yet another liability for UFC to consider in an asset purchase. The biggest lawsuit liability is the Ed Fishman lawsuit, in which Fishman Companies is asking for $10 million USD. Witness depositions (which is expected to include members of Zuffa LLC, the parent company of UFC) are set to begin next Wednesday, May 30th.