UFC lawsuit docs reveal Joe Silva's negotiation tactics with Nick Diaz, Roy Nelson, and Hector Lombard
Written by Tim Bissell
Thanks to the UFC Anti-Trust Lawsuit, a class action suit that was lodged by a team of former UFC fighters against ZUFFA LLC, we are learning new information about how the UFC operates. A great deal of this new information comes to us thanks to an expert report conducted by Hal J. Singer, who is an expert witness for the Plaintiffs (fighters).
Jason Cruz of MMAPayout and Bloody Elbow’s ‘Show Money’ podcast has presented a number of passages from Singer’s report (which were recently un-redacted) on his blog. From those postings we have learned about Brock Lesnar’s champion pay-grade, Lyoto Machida’s $100K stoppage bonus, and the UFC’s secretive PPV point system.
Something else that received a lot of attention in Singer’s report is the modus operandi of former UFC matchmaker Joe Silva. Silva, having worked with the UFC in the SEG era, was made head matchmaker for the promotion in 2001. He stepped away from the company in 2016, after receiving a large payment as part of WME-IMG’s purchase of ZUFFA LLC and the UFC.
Below are a number of interesting details regarding clauses in UFC contracts. Also below are examples of how Silva utilized these clauses to ensure that fighters were under UFC control for as long as possible, under less than ideal terms for fighters.
“197. Zuffa Contract Summary at 7; see also Hendrick 30(b)(6) V.l Tr. I97:12-198:8 (testifying on behalfof Zuffa that such a provision appears “in the majority of[Zuffa’s contracts with fighters]....”); Silva Dep. at 275:9-24, 276:8-18 (confirming that Zuffa’s contracts include provisions that toll the agreement for any period that a fighter is injured,retired, or otherwise unable orunwilling to appear in a bout).
I98. See Appendix, Table AI.
199. Zuffa Contract Summary at 8. See also ZFL-1941439 (letter demanding a halt to negotiations within the exclusive negation period).
200. Zuffa Contract Summary at 65. About ten percent of Zuffa contracts also contain an “option period” that allowed Zuffa to, in its sole discretion, renew the initial term (in bouts and months) of the contract at the end of a fighter’s contract a set number of times-effectively doubling or tripling a contract’s effective length. See, e.g., ZFL- 0050050 at 6 (“Fighter hereby irrevocably grants Zuffa two (2) separate one year-option periods (each referred to herein as an “Option Period”) to extend the durJtion of this Agreement including all of Fighter’s obligations hereunder... ZUFFA shall have been deemed to have exercised any applicable Option Period unless ZUFFA notifies Fighter in writing of ZUFFA’s intent not to exercise a certain Option Period by thirty (30) days prior to the commencement of the applicable Option Period ... Zuffa shall provide Fighter with the opportunity to compete in at least three (3) Bouts during the Initial Period and during each Option Period that ZUFFA chooses to exercise...”). See also Appendix, Table Al.
201. Silva Dep. at 59:5-13 (discussing May 2007 Confidential Information Memorandum, DB-ZUFFA- 00006712) (“Q. Then it [the 2007 Confidential Information Memorandum] says: ‘The UFC’s complete control and ownership of its content also discourages competing organizations from soliciting UFC fighters by restricting ability market prior fights for promotional purposes?’ ls that fair? Do you agree with that?...THE WITNESS: Yes.”); Goldman 30(b)(6) Tr. I18:5-21 (discussing 2009 Confidential Information Memorandum as Deutsche Bank’s designee) (“Q. Can you read the last sentence in that paragraph? A. The UFC’s complete control and ownership of its”
In one of Singer’s passages (see Extract 1) it is established that most UFC contracts, “include provisions that toll the agreement for any period that a fighter is injured, retired, or otherwise unable or unwilling to appear in a bout.”
‘Tolling’ is a legal term, which in this context, means pausing, delaying, or suspending a time period within a contract.
Sometime before November 2012 the UFC began utilizing another tactic to prolong the amount of time a fighter is contracted to the UFC; ‘injury extensions’ (see Extract 2).
“last fight on his contract, would not sign a new deal and that Zuffa used its discretion to not make Jackson’s bout the main event).
225. In April 2010, following UFC’s regular practice, Joe Silva offered fighter Nick Diaz a new contract before Diaz ‘s last fight. Silva explained, “ If they [Diaz’s team] turn it down put him in a prelim against a really tough guy for his last fight.” Silva Dep., Exh. 43 (ZFL-1421551). Silva testified that he would have matched Diaz against a tough guy regardless, but admitted that, all else equal, he would be more likely to give the main card to a fighter who has renewed their contract, as opposed to one who has not. See Silva Dep. at 401 :2- 19, 405: 12-19.
226. See, e.g., ZFL-2496264 (Fighter Hector Lombard was on “his 4th fight of an 8-fight Agreement.” Under his original contract he was entitled to “205K to show and S75 to win” but Joe Silva explains, “He is no longer under that deal. In return for not being cut he is fighting a I fight deal for 1OOK.”).
227. At some point before November 2012, Zuffa began automatically issuing injury extensions to Fighters known to be injured after a bout, regardless of whether the Fighter had been offered another light. Silva Dep. at 412:7- 413:22.
228. Jd. at 410:15-21 (Silva would “always just do it [issue the extension] for the time period in between fights .”); id. at 421 :6- 17 (same). See also ZFL-2536288 (Fighter Matt Wiman writes: “Hey Tracy, I’m a little confused about my extension ... Can u explain it in simpler terms to me ... I was only injured for 2-3 months and the letter states an 8 month extension.” Long responds: “Joe Silva gave me the time-frame. I believe it is based upon when you last fought and when you will fight. You last fought on October I, 2011. You are now scheduled to fight on September 29, 2012.” Wiman: .. So all the months I’m training and waiting patiently are not counted? This is be there’s so many fighters and you all have to honor your contracts?”). See also ZFL-2494948 (Bryan Caraway receives a six month extension on top of four month extension. Caraway: .. I was only hurt for 2 months?? Why is my contract being extended 6 months?’’ Long explains the math to Sean Shelby, based on time between fights). See also Deposition of Joseph Silva at 390:24-392 :3.”
Singer’s report alleges that the UFC began automatically extending the contracts of fighters’ who were known to be injured after a bout, thus prolonging how long a fighter was controlled by the UFC and how long the UFC had to offer them bouts. In Singer’s report there are two emails from UFC veterans who seemed unhappy regarding their extensions.
In a message to ZUFFA’s Fighter Relations czar Tracy Long 16-fight UFC veteran Matt Wiman wrote, “I’m a little confused about my extension... Can u explain it in simpler terms to me... I was only injured 2-3 months and the letter states an 8 month extension.” Long responded with, “Joe Silva gave me the time frame. I believe it is based upon when you last fought and when you will fight. You last fought on October 1, 2011. You are now scheduled to fight on September 29, 2012.” Wiman then asked, “So all the months I’m training and waiting patiently are not counted?” This is bc there’s so many fighters and you all have to honor your contracts?”
UFC vet Bryan Caraway had similar concerns. In a message to ZUFFA he said, “I was only hurt for 2 months?? Why is my contract being extended 6 months?”
In addition to language that meant time essentially stopped still, as far as contracts were concerned, if a fighter was injured or ‘unwilling’ to fight, about ten percent of ZUFFA contracts included an “option period.”
Singer’s report (see Extract 1) details this option period in considerable detail:
“... an “option period” that allowed Zuffa to, in its sole discretion, renew the initial term (in bouts and months) of the contract at the end of a Fighter’s contract a set number of times — effectively doubling or tripling a contract’s effective length.”
In the report there is a direct quote from a fighter contract outlining this process:
““Fighter hereby irrevocably grants Zuffa two (2) separate one year-option periods (each referred to herein as an “Option Period”) to extend the duration of this Agreement including all of Fighter’s obligations hereunder... ZUFFA shall have been deemed to have exercised any applicable Option Period unless ZUFFA notifies Fighter in writing of ZUFFA’s intent not to exercise a certain Option Period by thirty (30) days prior to the commencement of the applicable Option Period... Zuffa shall provide Fighter with the opportunity to compete at least three (3) Bouts during the Initial Period and during each Option Period that ZUFFA chooses to exercise...”).”
The UFC’s typical practice is to offer a new contract to fighters before the last fight on their contract. If a fighter’s contract includes option periods, the fighter would need to decide whether or not they wish to sign a new deal knowing that if they didn’t the UFC had the power to exercise the option and have the fighter serve out an identical contract to the one they previously signed.
If there was no option period in a fighter’s contract, they faced a separate dilemma about whether or not to ‘re-up’ with the UFC when offered a new deal before the last fight on their current contract.
In a deposition former UFC welterweight title challenger Jon Fitch discussed that exact scenario (see Extract 3). “If I didn’t sign up, if I didn’t to do the re-up with the contract, I wouldn’t have gotten a bout agreement,” said Fitch who added that in that situation the UFC would likely force him to wait out the entire remainder of his contract for either his last bout or a release from the company.
“219. Silva Dep. at 456:2 1-25. See also Silva Dep. at 455:6-456: 11; Silva Exb. 53 (discussing a fighter (Thiago Alves) who was ‘·on a 7 fight win streak and was the number one contender to fight the winner of GSP versus B.J. Penn,” and offering Alves a “2 tier contract, with a higher path if he becomes champ. The good thing about those is it locks them in longer if they become champ’’).
220. Deposition of John Fitch, February 15, 2017 at 119 (“Q: And the reason why you would have to had sit out a year is because after you finish,ed your fight —A: Because if I didn’t sign up., if I didn’t to do the re-up with the contract. I wouldn’t have gotten a bout agr,eement. Q: Until? A: They would have. exercised their time limit term to the full. Q: And the reason you know about that is because you heard about. Huerta? A: Because they had done it to other people. Q: And you’ve heard about— you gave one other example; is that correct? A: Huerta and Arlovski. Q: So you know two examples - A: l know of two examples where the guys were brn.ve enough to see it through .. Most guys know if you don’t sign ~he re-up, you don’t get your bout agr,e.ement. If you don’t get your bout agreement, you don’t get paid, you don’t get money, you can’t feed your children.”).
221. Silva Dep. at 385 : 15-2l(‘’Q. ffa fighter refused to accept the new deal that you were offering them between the third and the fourth fight, he would face a situation where he was fighting that last fight at less compensation than he would have gotten had he accepted the new deal ... ? A. Yes, be chose to fight at less money.”).
222. Zuffa oould extend a Fighter’s contract by six months if the Fighter turned down a proposed bout. Silva Dep. at 426:6-12. In principle, Zuffa could retain a fighter under contract in perpetuity if the fighter refused to accept matchups that Zuffa proposed. Silva Dep. at 433:13-434:16. In a May 2014 e-mail string between General Counsel Lawrence Ep!>1ein and Assistant General Counsel Kirlc Hendrick, Mike Mersch discussed how be.st to retain Light Heavyweight Champion Jon Jones. Epstein writes: “We need to send him a letter formally offering the Gustafson fight and giving him a s.pecific deadline to accept or reject. When he says no we need to extend him.’’· See ZFL~0990908. After Roy Nelson’s manager turned down a new contract offer in May 2013, Lorenzo Fertitta wrote “I offered 9 fights 125+50 for regular bout, 500 flat for title fight, 500 plus ppv if defending. If ppv does 600k buys he makes Um. Very”
In his deposition Fitch said this is what happened to current UFC heavyweight Andrei Arlovski, and former fighter Roger Huerta. “I know two examples where the guys were brave enough to see it through,” said Fitch. “Most guys know if you don’t sign the re-up, you don’t get your bout agreement. If you don’t get your bout agreement, you don’t get paid, you don’t get money, you can’t feed your children.”
In Silva’s deposition (Extract 3) he was asked the following about the practice Fitch described: “If a fighter refused the new deal you were offering between the third and fourth fight, he would face a situation where he was fighting that last fight at less compensation than he would have gotten had he accepted the new deal?” Silva answered, “Yes, he chose to fight at less money.”
Along with the power to make fighters keep competing under terms from an old agreement, and the freedom to wait extended periods of time before offering fighters bouts, the UFC also had another very powerful tool written into their contracts with fighters.
In Silva’s deposition he confirmed that the UFC had the ability to extend fighters’ contracts for six months if they turned down a fight. The report states that, “In principle, Zuffa could retain a Fighter under contract in perpetuity if the Fighter refused to accept matchups that Zuffa proposed.”
The report also includes email exchanges from Silva that show this provision being considered with both Jon Jones and Roy Nelson (Extracts 3 and 4).
In 2014 the UFC’s top lawyer Lawrence Epstein wrote in an email to Assistant General Counsel Kirk Hendrick and Senior Vice President Business, Legal, and Government Affairs Mike Mersch, about Jones, stating, “We need to send him a letter formally offering the Gustafson (sic) fight and giving him a specific deadline to accept or reject. When he says no we need to extend him.”
In 2013 Lorenzo Fertitta wrote this about Nelson after his manager turned down a new contract offer. “I offered 9 fights 125+50 for regular bout, 500 flat for title fight, 500 plus ppv if defending. If ppv does 600k buys he makes 1.1m. Very fair offer.”
Silva responded with, “If you can’t get Roy to do that deal tell him instead he can fight Dos Santos June 15 in Winnipeg on his last fight for 24+24. [I]f he turns that fight down it allows us to extend his contract.”
“fair offer.” Joe Silva responded “If you can’t get Roy to do that deal tell him instead he can fight Dos Santos June 15 in Winnipeg on his last fight for 24+24. [l]f he turns that fight down it allows us to extend his contract.” See ZFL- 1897652 at 748. See also Deposition of Joseph Silva at 126:14-18 (“Q. But you have, during the course of your work at Zuffa, caused notices to go out to fighters extending the terms of their contracts when they’ve turned down fights; correct? A. Yes.”).
223. Deposition of Kyle Kingsbury, February 17, 2017, at I 18. See also Deposition of John Fitch, February 15, 2017, at 87 (“A: So they took really tough amateur-type guys, but the crowd didn’t know who they were. It’s a lose-lose fight for somebody with notoriety. Because if you don’t go in there — if you go in there and completely beat the guy up, fine, you were supposed to. They didn’t know who the other guy was. You go in there and you win, but you don’t destroy the guy, oh, you suck now because you didn’t destroy a guy with no name. Or you lose, you lose to a guy who has no name, and now your notoriety and your value drops immensely. They may even cut you because you lost. So that is one of the most subtle ways that they really put fear into people, is they control your destiny. They control who you fight, when you fight, and how much you fight for.”).
224. UFC on Fuel TV 7 post-fight media scrom (Feb. 2013), available at https:fiyoutu.b y() Ti1Tqn2w’l - 2rn9s See also Deposition of Nate Quarry, September 30, 2016, at 47:23-25 (‘’As Joe Silva said one time, ‘If you don’t like the first fight 1 offer you, you’re sure as shit not going to like the second one.”‘). See also ZFL-1421551 (In April 2010, Joe Silva wrote regarding negotiations with UFC fighter ick Diaz, “I lowballed them on purpose the first offer knowing they would tum it down. How bout I come back with 29+29 32+32 35 35 38+38. lf they tum it down I put him in a prelim against a really tough guy for his last fight.”). See also Silva Dep. 405: 12-19 (“So everything’s equal. And the only thing you know now is that this guy’s main card worthy and he has agreed to re-up, versus, it’s the same situation, main card worthy where he’s not agreed to re-up. You’d more likely give the main card in a better position to the guy who has agreed to re-up as opposed to the one who hasn’t; right? A. Yes.”); ZFL-2496215 (July 2012 email exchange between Joe Silva, Michael Mersch and Tracy Long discussing that it was Quinton Rampage Jackson’s”
Silva’s negotiating style is also on display in emails from April 2010, when he discussed his approach to trying to re-sign Nick Diaz (see Extract 4). “I lowballed them on purpose the first offer knowing they would turn it down,” wrote Silva. “How bout I come back with 29+29, 32+32, 35+35, 38+38. If they turn it down I put him in a prelim against a really tough guy for his last fight.”
In his deposition Silva was asked about this tactic of giving a fighter a “really tough guy” for their final fight, if they have refused to re-up with the UFC. Talking about the Diaz situation, Silva said he would have given Diaz a “tough guy regardless”, but conceded that he was more likely to give a fighter who re-upped a slot on a main card versus a fighter who was fighting out their contract.
The documents reveal another window into Silva’s negotiation tactics thanks to what is shared regarding Hector Lombard (see Extract 2). Singer’s report quotes Silva, who explained that when Lombard was on the fourth fight of his eight-fight UFC contract, he stood to make $205,000 to show and $75,000 to win. However, Silva said he was able to convince Lombard to fight for less than half that amount ($100,000) in exchange for not being cut by the promotion.
*This article originally appeared on Bloody Elbow. It was written by Tim Bissell on Aug. 13, 2019
