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Thursday legal talk: PRIDE, Fishman, and The Fertitta Brothers

By Zach Arnold | March 21, 2007

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By Zach Arnold

On Jim Rome is Burning, ESPN TV personality Jim Rome announced that on his show tomorrow, PRIDE double-crown champion Dan Henderson will be on a correspondent’s segment.

According to the Clark County Court District web site, judge Timothy C Williams has been assigned to the Fishman Companies vs. DSE case (case number 07-A-537910-C).

There are a significant amount of questions already in play in regards to the court case itself. However, I came up with more after listening to the Sherdog radio interview with Ed Fishman that I think are really pertinent to ask.

When you discuss the sale of PRIDE (either its assets or DSE itself), realistically the only ‘assets’ of value are the fighter contracts. The VTR collection has little value in the US and the PRIDE name/logo isn’t substantial (it could be if UFC used its marketing power behind it, but that would be speculative to suggest). In fact, the PRIDE name/image has been damaged by the Shukan Gendai negative media campaign. Therefore, you obviously have to look at what kind of contracts PRIDE had with its fighters, particularly their top gaijin stars. Emelianenko Fedor and Wanderlei Silva are not believed to be under PRIDE contract right now. The much bigger issue is what kinds of contracts PRIDE signed with their fighters and what lawyer(s) they used to write them up.

One of the main attorneys dealing with foreign fighters that I believe could be called into question by The Fertitta Brothers (or Fishman Companies’ legal team as well) is Michael (Thomas) Connette, who has been representing Bob Sapp. Connette became publicly known during the scandal with Bob Sapp and K-1 for Simon Rutz in Holland last year. K-1 and K-1 friendly media outlets pointed the finger at Connette and basically labeled or indicated him to media consumers as a DSE lawyer. Excluding the K-1/Sapp scandal, I was told from a source in the Japanese fight scene that supposedly Connette could have had some sort of relationship with PRIDE Vice President Sotaro Shinoda (who is close to Nobuyuki Sakakibara) in regards to possibly preparing fighter contracts. Connette’s name also surfaced when PRIDE had legal trouble with Royce Gracie after Royce worked for K-1 against Akebono. Connette is still registered as a foreign lawyer in Japan, with his initial background being in California.

I mention Connette’s name because there could (in my opinion) be a chance that he wrote some of the PRIDE fighter contracts. If so, there are certainly legitimate and valid questions to ask about the amount of potential loopholes in the deals. Also, is Connette familiar with the ownership structure of DSE, therefore perhaps putting him in a position to be forced to testify in the Fishman Companies lawsuit in regards to his potential knowledge of such facts (subject to any legal privileges that may be invoked)?

  1. What if the contracts are personal service contracts that are not assignable to third parties if PRIDE is sold? This would result in the fighter having a right to terminate the contract. If that is the case, the contracts likely are not transferrable by DSE and therefore have little to no value for a new buyer.
  2. What if the contracts specifically state permission to take performance-enhancing drugs? This issue was brought up in a report by The Fight Network when Pawel Nastula failed his drug test after the first PRIDE US show on 10/21/06.
  3. What if the contracts have no enforceable penalties against fighters for no-showing (PRIDE did try to take Royce to court in Los Angeles in the past, that should be duly noted)? In the Royce case, DSE was suing him for breaking an ‘exclusive contract’ to fight in K-1.

If you have contracts that aren’t worth the paper they are printed on, how much impact does this have on the value of the assets in a purchase by The Fertitta Brothers? And, could Connette be called to testify in the Fishman Companies lawsuit against DSE if he (Connette) had a hand in DSE activities?

If the Fertitta Brothers do in fact make a deal with Nobuyuki Sakakibara for just the assets of PRIDE, they would likely enter into a heads of agreement. It’s the equivalent of a handshake that’s not legally binding until lawyers perform due diligence (which could take 30 days or longer to perform). If the Fertitta’s lawyers turn up anything that doesn’t pass the sniff test, they could put a stop to the potential transaction.

If the Fertitta Brothers attempt to buy PRIDE’s assets, there’s certainly reason to believe that Fishman Companies could attempt to legally attach onto that sale payment through its lawsuit against DSE by arguing to judge Timothy C. Williams that DSE’s company has shady businessmen and/or cannot be trusted to pay the remedy if they lose in the Clark County district court lawsuit. If Fishman Companies attempts to make this argument, this is where you could see the yakuza scandal (Shukan Gendai’s negative campaign, Fuji TV cuts ties, etc.) come into play. At that point, if Fishman Companies or the courts (or even the Nevada Gaming Commission) gets involved and believes that there is shady activity involved with DSE, that could be a big legal issue.

Another interesting angle to consider in these stories is Nobuyuki Sakakibara’s recent visit to Brazil to visit both Chute Boxe and BTT (Brazilian Top Team). Is it possible that some Brazilian fighters happened to sign brand new contracts that are different than the traditional PRIDE contracts they signed in the past?

When I look at the whole story involving the potential sale of PRIDE, it eerily reminds me of what happened with World Championship Wrestling (WCW). When things were looking real bleak, former WCW boss Eric Bischoff tried to purchase WCW from Turner Broadcasting through Fusient Media Ventures. However, once Fusient found out that TBS wouldn’t guarantee airing WCW on its network, Fusient backed out of the deal. WWE ended up purchasing WCW’s assets, primarily its tape library. And the rest was history.

Onto today’s media headlines.

The Orange County Register reports that Diego Sanchez was suspended by the California State Athletic Commission after testing positive for marijuana. The suspension was three months long. It had no impact ultimately on Sanchez’s fighting schedule.

  1. The UNLV Rebel Yell: Zuffa gambles on WEC event Saturday
  2. The Durango Herald: Adrenaline bash (Sky Ute Paviliion)
  3. Mad Squabbles: The Digg of MMA
  4. UFC HP: Kendall Grove – Cry Him a River
  5. NBC Sports: Mike Swick’s wild journey comes full circle back to Houston
  6. CBS Sportsline: Interview with Pat Miletich
  7. Bloody Elbow: What’s wrong with bodogFight
  8. MMA Insider: Ring of Combat tournament update
  9. China Combat: Introducing Shou Bo

Topics: All Topics, Brazil, IFL, Japan, Media, MMA, PRIDE, Zach Arnold | 17 Comments » | Permalink | Trackback |

17 Responses to “Thursday legal talk: PRIDE, Fishman, and The Fertitta Brothers”

  1. Zack says:

    Great article, Zach.

  2. Jonathan says:

    Man…with all of this stuff surrounding Pride, I just do not see this whole thing ending with Pride still existing as it did in the past…and that saddens me as a Pride fan.

    Long Live Pride

  3. Liger05 says:

    I for one and quite worried about what a future Pride may be like. I fear even if it survives it will be different to the Pride which really got me into MMA. I like UFC but that doesnt compare to what Pride was like in its glory days.

  4. GassedOut says:

    Tumultuous days indeed for Pride appear to be ahead.

    It’s going to be wild to watch I bet…

  5. Karl says:

    Great informative post man. I have to say I wasn’t a big fan of your podcast and stopped listening a while ago (more to do with the other people on the show). But this is the most informative post on the Pride issues I’ve seen. Far more in depth and knowledgeable than anywhere else. Keep up the good work.

  6. The Gaijin says:

    I think its speculative to say that the library and logo don’t have much value. What if they’re planning on opening up their own “all MMA” pay channel…stuff like that would have massive programming value IMO.
    They’d also have tonnes of archival footage on just about any “name” fighter in the biz today so that they can continue to run their massive hype machine and any fights they have coming down the pipe could get huge exposure by pumping out old “showcase” fights on UFC Unleashed.

    PRIDE as a brand is still very recognizable worldwide. Outside of the US/NA I’d venture to say that PRIDE is still FAAAAAAAR widely known as PRIDE has always used international fighters. To me if the Fertittas purchased PRIDE with the intent of running UFC/PRIDE seperately, you’d run UFC in NA and EU and PRIDE in Japan/Brazil/Russia/So.Ko etc. Then you’ve got yourself two different organizations that are ALREADY well established running internationally. Not to mention the ability to hype up large scale “cross promotional” cards on NYE or something along those lines.

    Although I fully agree – if the fighter contracts are not part of this agreement, clearly $65M is waaaaaay too much to be paying for what is essentially a tape library, logo, goodwill (if that even exists in Japan following all the scandals) and other assets such as rings, promo items etc.

    Time will tell.

  7. David says:

    Good article.

    I saw this tidbit on Meltzer’s site:
    “–It was reported today by Josh Gross that Mauricio Shogun Rua had signed a unique contract with two fights in Pride and two fights in UFC. If this is accurate, that would certainly seem to indicate a deal with both under the same umbrella would have been completed.”

  8. Jordan Breen says:

    “–It was reported today by Josh Gross that Mauricio Shogun Rua had signed a unique contract with two fights in Pride and two fights in UFC. If this is accurate, that would certainly seem to indicate a deal with both under the same umbrella would have been completed.”

    Should be noted that this info was only relayed by Gross. Gross said he had originally gotten wind of it through Sherdog Japanese reporter Stephen Martinez, though I suspect he may have meant Brazilian reporter Gleidson Venga.

  9. blacksquareredbox says:

    Zach:

    Since you were so excited about DSE’s alleged criminal ties, I figured you’d be intrested in Zuffa’s.

    “A HISTORY OF DECEPTION AND GREED: THE INSIDE STORY OF XYIENCE CREATOR RUSSEL PIKE’S SHADY BUSINESS DEALINGS”, found at http://unlimitedfightnews.com/wordpress/?p=26.

  10. Kev says:

    bsb, get over it. PRIDE’s criminal allegations brought down the company. Xyience’s trouble won’t hurt the UFC. There’s a reason why PRIDE’s allegations deserve more coverage.

  11. The Gaijin says:

    Unless he was being totally ridiculous and sarcastic I really don’t see your need to blast away like that Kev.

    I think its a pretty interesting story seeing as Xyience’s tv ads, fight sponsorships etc. played a pretty big role in UFC getting their footing set. I agree its nowhere near the level of PRIDE, but there’s a point to it that you shouldnt just blatantly ignore something like this when you (not you personally) post every single tiny rumbling wrt PRIDE’s shady business ties.

  12. PizzaChef says:

    SHOGUN TO FIGHT FOR BOTH UFC AND PRIDE:

    http://www.mmanews.com/ufc/Shogun-Signs-New-4-Fight-Contract-2-With-The-UFC.html

    Wait nevermind, it was rumor, reports now is it’s a 4 fight contract with PRIDE.

  13. JThue says:

    MELTZER REPORTS:

    “-Nobuyuki Sakakibara yesterday told several members of the U.S. Pride staff that the company is in the proces of being sold to Lorenzo & Frank Fertitta. He said the agreement in principal is done but there are still some minor points to be worked out and the contract is not signed. Sakakibara said he would be leaving the company but that everyone would be keeping their jobs. The company would be operated separately from UFC, but obviously UFC could use any Pride fighter for a big match that it needed.”

    http://www.wrestlingobserver.com/wo/news/headlines/default.asp?aID=19013

  14. JThue says:

    http://www.sportsline.com/boxing/story/10080671
    – Interview with Pat Miletich. Sam Hoger signed for IFL.

  15. The Gaijin says:

    http://www.sherdog.com/news/news.asp?n_id=7047
    – Sanchez Fined, Suspended for Marijuana

    Was this ever in the news before?? I don’t recall hearing about it ever…did they decide they were going to retroactively levy the fine and suspension?? IIRC this is pretty lenient compared to other fighters suspensions for cannabis under the NSAC…I’m assuming this might have been a “sweetheart suspension” b/c Sanchez has an impending fight?

    If this was in the news before – plz disregard my comments.

  16. klown says:

    Testing athletes for marijuana is fucking retarded.

  17. […] Here’s his coverage earlier this week (while this was still rumor he reported on it) on The Fertitta Brothers (owners of UFC) trying to finalize buying PRIDE (For years the major group in Japan). […]