Penick's Take
PENICK: Bellator/Eddie Alvarez contract dispute presents many questions, few clear answers
Jan 8, 2013 - 7:35:47 PM PENICK: Bellator/Eddie Alvarez contract dispute presents many questions, few clear answers

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By: Jamie Penick, MMATorch Editor-in-Chief

"We have a matching period and an exclusive negotiation period as well. I like Ed as a human being. I'm not going to drag it out. If we can come to an understanding that makes sense to Bellator and makes sense for Ed, perhaps we'll re-sign him. If we can't come to that, then we'll probably just do one more fight with Ed and move on and let him go to investigate any opportunity he wants to investigate. I've got an affinity for Ed Alvarez; he's been great for this organization. We'll see how it plays out."

This was Bellator CEO Bjorn Rebney in June of last year, speaking to our Rich Hansen about what was to come in the future of Eddie Alvarez. It seemed all but inevitable that the UFC would put forth an offer that Bellator could not or would not match once his contract expired, allowing Alvarez to continue progressing up the ladder in his career, but then something went awry.

The UFC's offer, while containing a provision for eventual pay-per-view dollars, allegedly did not guarantee any money from pay-per-view. Because of that, Bellator felt they could match the guaranteed terms of the deal, which Rebney claimed on Monday to contain a $250,000 signing bonus, along with a starting fight purse of $70,000 to show and $70,000 to win, escalating with each subsequent fight.

However, that leaves any potential pay-per-view earnings off the table for Alvarez, who feels that Bellator has not actually matched the UFC's offer. He aired his grievances this week, revealing that the two sides are now locked in litigation over essentially whether or not Bellator's deal is a match.

Alvarez says it's not, Rebney believes otherwise, and this once supposedly strong relationship has been strained. A distraught Alvarez tried to get his side of things out to the public on Monday, but the rebuttal from Rebney exposed a more complicated issue at hand.

If the UFC's offer truly didn't guarantee any pay-per-view money, and Bellator only needed to match what was guaranteed, then they may have a legal leg up on Alvarez. The UFC may have dropped the ball in not guaranteeing at least one pay-per-view booking, because had that been part of the language it's something that Bellator would not have been able to match. Instead, Alvarez may be at the mercy of the deal he signed with Bellator initially that gave them this right to match.

After that, though, the next question becomes: is it worth the money to keep Alvarez? There's a few reasons it doesn't make sense for Bellator to do so. For starters, he's clearly not happy and doesn't want to be there any longer. He was extremely upset during his appearance on The MMA Hour on Monday, and the way the issue is perceived is negative publicity for Bellator.

Whether they're legally, to-the-letter, in the right when they say they've matched the deal, fans understand that their inability to offer pay-per-view means there's money potentially being left on the table for Alvarez. He's called it a significantly different amount of money, and so it looks like Bellator has turned on a man who Rebney has said he had an "affinity" for just six months ago. The thinking now in many circles is: if Bellator can treat Alvarez this way, why would anyone want to sign with them?

Now, Rebney and Bellator don't see it that way. They see it as trying to keep a man who has been a cornerstone of their organization, but they're also looking at a hefty paycheck for a fighter who hasn't drawn a ton of eyes for them to date. Granted, that goes for everyone on their roster, but in addition to Alvarez's feelings of betrayal from the organization and the bad publicity this non-matching "matched" deal has brought about, why drag it out further?

They don't want to lose one of the best fighters on their roster, obviously, and they don't want to let every major fighter they have go over to the UFC. At least, they don't want to make it easy, especially with the backing of Viacom as their new parent company. On that note, they believe they've matched what the UFC guaranteed Alvarez, and they think he should be fighting for them.

There's a lot of gray area in regards to contract offers that no one but the parties involved have seen, but in this instance, it appears we've got the UFC not making the clearest offer possible, allowing Bellator to claim their matching right without having to come up to the full potential of earnings Alvarez could make under the UFC deal. Bellator's inability to truly offer anything close to the UFC's pay-per-view earnings goes against the idea of actually "matching" the UFC's offer for Alvarez, but he may be in a spot where that doesn't matter. Not if it wasn't guaranteed.

At the same time, the lack of earning potential could possibly work in Alvarez's favor if this were to hit a courtroom, especially if Bellator did what Rebney claimed in swapping out the words "UFC" for "Bellator" on the contract offer sent over. If they offered something in a contract - namely, potential pay-per-view points - that they can't possibly have to offer, that's a potentially significant issue.

It's just not clear that keeping Alvarez is ultimately even the right move for Bellator. If they somehow get to keep him after litigation here, he's going to be a disgruntled fighter who isn't thrilled at being cost a potentially significant amount of money. Not to mention the fact that he's not going to be happy fighting anyone else on Bellator's roster outside of a rematch with Michael Chandler.

That brings it back to the comment from Rebney in June. If he truly didn't want this to drag out, and if it's clearly not making sense for Alvarez, the right thing to do now may be just to let him go. Continuing to fight this in court, and potentially making Alvarez sit up to a year - which he seems prepared to do despite being very unhappy about it - does nothing but hurt Alvarez. It doesn't help Bellator if they drag this out and he comes back. It may not help Bellator if he came back in the first place.

They have the right to match the UFC's deal. They have the right to keep Eddie Alvarez around if they want to keep Eddie Alvarez around. But if they're not able to truly match every single letter of the UFC's deal as written, is it truly a match? And can the strained relationship with Alvarez even be mended after all of this? It's a saga that's just beginning, and there's no clear way path to it's end.