Combat Sports Law

The first contract fighters sign is sometimes their worst.  Their deal with their manager.

The world of MMA management is poorly regulated.  It varies from jurisdiction to jurisdiction and standards are far below those in unionized sports where players associations impose strict thresholds for agent certification.

In some States and Provinces anyone can be a manager.  All you have to do is say you are one and, presto, you qualify.

In others managers need to apply for a licence and nothing more.  In these the standard for licencing is low.  Some jurisdictions impose restrictions such as maximum fees that can be charged and cap contract lengths.  Others go further and require fighter/manager contracts to be on commission approved forms.  Often times these protections are not followed.  Many managers that are licenced do not bother being licenced in all jurisdictions where their clients compete and from where they take a cut of the fighter’s purse.  This largely goes unchallenged and there are few examples of athletic commissions cracking down on exploitative management practices.

In short, combat sports management is the wild west where largely anything goes.  Some of the worst contracts fighters sign are those with their own managers, the latter who are supposed to look out for the best interests of their clients instead often start the relationship off with an exploitative contract.

Over the years I’ve had the opportunity to navigate numerous management contracts.  Below are examples of some of the clauses managers have asked fighters to sign with some topics fighters should critically review before agreeing to the terms.

LENGTH – The longer the better for the managers, not the fighter

If your manager is doing a lousy job do you want to be tied to their services for a long time?  Probably not.  Consider having a short relationship with a firm end date where you can re-evaluate whether it is the right relationship for your career moving forward.

“Manager shall exclusively represent Fighter for a term of Two Years or Eight Fights [Whichever is longer]…terms of this agreement will pause for injuries that last longer than 60 days.”

“Fighter hereby engages Manager as his sole and exclusive worldwide personal representative for a period of 3 years”

“the current Agreement is for an initial duration of three years … At the end of this period, the Agreement shall subsequently be renewed for subsequent period of three years, except if one or the other of the Parties notifies the other of its desire to put an end to the Agreement at its term”

PAY – Let’s make sure we get a slice of all of it! 

Managers should add value.  They should be paid fairly for new opportunities they bring to you over and above those you can get on your own without their help.  If they are charging a percentage of your pay for their services you should make sure they are the one’s bringing that pay your way in the first place.  Should your manager be entitled to a percentage of a win bonus?  Discretionary bonuses?  Other factors solely based on your performance? Carefully review clauses like these to make sure you are ok with the manager taking a percentage of all of these potential streams of income:

Management fee will be charged on “Fight Related and Non-Fight Related Gross Income.  For the purpose of this Agreement shall be defined as: Fighter’s purse, Fighter’s win bonus, Fighter’s signing or re-signing bonus, any/and all other Fight bonuses, Fighter’s Pay-Per-View Bonus, if applicable, and all other bonuses. 

Management Fee will be charged on “all forms of compensation, prizes or financial contributions earned by the Athlete within the limits of his activity (prize money, bonuses or any other consideration gained in the course of any kind of bout, fight, tournament or exhibition whatsoever, financial contributions from Contracts in relation to his mixed martial arts activity”

Management fee will be charged on Gross Income “For purposes of this Agreement, the terms “Gross Income” shall include, without limitation, all salaries, fees, revenues, residuals, royalties, earnings or income (whether in cash or in kind and including, without limitation, gifts, bonuses), any and all sums resulting from Fighter’s activities in mixed martial arts and related matters and the uses of the results and proceeds thereof, payments for termination of Fighter’s activities, payments to refrain from any such activities, and the payments in connection with the settlement or other disposition of any dispute concerning said activities,  which are directly or indirectly earned, received or by Fighter or his heirs, executors, administrator or assigns or by any other person, firm or corporation on his behalf, without deduction of any nature or sort. ”

WHEN YOU GET LESS WE DON’T!

Sometimes your pay will decrease based on missing weight, not getting a win bonus, fines for transgressions etc.  Should your manager still get a full piece of the pie?  Some managers think so:

“Fighter agrees that Manager’s fees are not subject to and will not be decreased based on any penalty levied against Fighter (e.g., failing to make weight) in connection with his mixed martial arts activities.”

EXCLUSIVITY FOR FIGHTER BUT NOT MANAGER

Your manager will likely insist on exclusive representative.  But they will take on other clients.  To what extent are they managing more athletes than they can handle while still fulfilling their obligation to you?  How will they avoid conflicts of interests in making sure they don’t pass up your best interests when landing deals for for other athletes they represent?

“In providing such management services, Manager shall be Fighter’s exclusive worldwide representative. However, Fighter acknowledges that Manager either currently performs or contemplates performing the same or similar services for persons other than Fighter, and that nothing contained herein shall restrict the right of Manager to continue or commence all such activities”

“In providing such representation services, Manager shall be Fighter’s exclusive worldwide representative.  Fighter acknowledges that Manager either currently performs or contemplates performing the same or similar services for persons or entities other than Fighter, and that nothing contained herein shall restrict the right of Manager to continue or commence all such activities.”

FIGHTERS PROTECT THEIR MANAGERS

Managers like to cover their bases.  If they get sued they may be looking for indemnity from you.  Review clauses like these, make sure you understand them and consent to them before signing on the dotted line:

“Fighter agrees to indemnify and hold harmless Manager against loss or threatened loss or expense by reason of the liability or potential liability of Fighter for or arising out of any claims for damages from previous management agreements.”

“Fighter shall indemnify, defend and hold Manager harmless from and against any and all losses, claims, damages, or liabilities, costs and expenses, including without limitation, reasonable legal fees and expenses, to which Manager may become subject of a lawsuit as a result of or in connection with any information provided by Fighter to Manager”

ARBITRATION

If you run into a dispute with your manager can you sue them?  In which jurisdiction?  With which choice of law?  Are you subject to arbitration with up front fees so expensive that you will be reluctant to exercise your rights?

“Any and all claims, disputes and controversies arising out of or in connection with this Agreement and any documents or instruments executed in connection with it, or the interpretation thereof, shall be resolved by binding arbitration”

“Any and all claims, disputes and controversies arising out of or in connection with this Agreement and any documents or instruments executed in connection therewith or in furtherance thereof, or the interpretation thereof, shall be resolved by arbitration by a retired judge.  Any such arbitration shall be conducted in confidence … The decision of any such arbitration shall be binding on the parties and shall be fully enforceable in any court of competent jurisdiction.  In the event of an arbitration, the prevailing party shall be entitled to recover reasonable attorney’s fees and other costs incurred in the enforcement of terms of this Agreement or for the breach thereof.”

FIGHTERS WILL PROMOTE THE MANAGER?

Managers are supposed to promote their fighters.  Many contracts sneak in language turning this upside down where the fighter is agreeing to promote their managers services.  Think hard about who is serving whose best interests in the relationship.

“Fighter authorizes Manager to utilize his/her name and likeness in connection with securing and retaining sponsorship/endorsement opportunities on Fighter’s behalf during the term of this contract. This includes, but is not limited to the use of Fighter’s name and likeness on the Manager website, and in Manager marketing materials.”

“The Athlete authorises the Manager to use his image and/or his name in order to present or to promote the brand (of the manager) via any means or any medias of any kind whatsoever.”

“Fighter grants to Manager the right to use Fighter’s name, nickname, photograph and likeness in connection with promoting Fighter and Manager, its affiliates and principals.  Fighter hereby exclusively grants to Manager the unrestricted worldwide right to merchandise, sell, use, edit, disseminate, display, reproduce, print, publish and make any other uses of the name, nickname, image, sobriquet, voice, persona, signature, likeness and/or biography, and other intellectual property of the Fighter without any further compensation to the Fighter, for the purposes of advertising, promotion, publicity, and exploitation of Manager, its affiliates, and principals.”

LET’S KEEP THINGS SECRET

Many managers don’t want word getting out about the rates they charge or their other contractual terms.  Are you ok with a contractual confidentiality clause where you can be sued for discussing facts publicly?

“Fighter shall not disclose to any third party (other than his employees and agents (including private counsel), in their capacity as such, on a need-to-know basis), any information with respect to the terms and provisions of this Agreement”

“Unless required by law the terms of this Agreement are strictly confidential and shall at no time be divulged to any third party (other than their respective professional advisors) without the prior written consent of both parties.”

WHAT EXACTLY DOES THE MANAGER HAVE TO DO?

Other than take a percentage of your earnings does the contract spell out what the manager is going to do for you?  Many MMA fighter/manager contracts say precious little about what the manager’s obligations are.  The contract should spell out exactly what they must do in order to fulfill their obligations to manage you.  By way of example the California State Athletic Commission sample manager contract spells out the below obligations.  This is far from a comprehensive list but one starting point to look at the types of terms you may want your manager to agree to:

MANAGER AGREES: 1. To guarantee Boxer that the Boxer’s share of money earned pursuant to this contract shall not be less than per year during the term of this contract or Manager will pay Boxer the difference between the amount actually earned and . 2. To use Manager’s best efforts to secure remunerative boxing contests and at all time to act in the best interest of Boxer. 3. To make no contract for a boxing contest where Manager has a direct or indirect financial or contractual interest in Boxer’s opponent. 4. To render a full, true, accurate and itemized accounting to Boxer and to the Commission if the Commission so requests. Said accounting shall include, with respect to each other contest, exhibition or match: (a) the amount of money received by Manager pertaining to the contest, exhibition, or match; (b) the amount of money actually paid to boxer, (c) the amount of money owed to Manager by Boxer, provided, however, that no sum of money shall be claimed under this subsection which cannot be substantiated by a receipt signed by the Boxer within thirty (30) days after Boxer sends a written demand of an accounting, by certified mail to Manager. Boxer shall send a copy of any demand made to Manager to the Commission by regular mail. 5. To keep Manager’s records available to and open for inspection by Boxer and/or the Commission upon demand.

MY 2 CENTS –

It is far easier not to sign a bad contract than it is to get out of one after the fact.  At the outset of the relationship fighters should demand that managers put their money where their mouth is.  Short term contracts.  Easy to terminate.  Produce results.

Understand your contract before you sign it.  If the terms are not serving your best interests negotiate and change them.  If this does not work consider if your proposed manager is the right fit for you.