Fedor doesn't usually look like this
Proof that we scour the bottom of the internet barrel so you don’t have to: we found a corporate lawyer trying to bring dealmaking techniques into MMA.
Reader Frank F claimed in an ESPN blog that corporate law has a solution to a problem facing the UFC. (He’s wrong.)
After the jump.
The background:
Feder Emelianenko is widely regarded as the top heavyweight mixed-martial artist in the world today. But he has never fought in the UFC, the dominant organization in the sport.
The UFC is willing to pay Emelianenko a ton of money, but they’re concerned that he will beat the UFC’s top heavyweight, former pro wrestler Brock Lesnar, then go off and fight for another organization. That would leave the UFC with no beltholder and looking pretty stupid, so they’re insisting that any contract would have to last at least as long as he holds the belt.
Emelianenko prefers to remain more of a free agent, and only wants to sign a deal for a limited number of fights.
According to Frank, this is neatly handled by a “shotgun clause.”
The iron, according to Jonathan: the “shotgun clause,” a passage that would allow Emelianenko to make a bid to buy out the remainder of his contract. “The UFC then has the option of allowing Fedor to buy out his contract, or of paying Fedor an amount equal to the bid amount to stay,” Jonathan writes. “For example, he can offer the UFC $100 to buy himself out of his contract. The UFC can then accept his $100 buyout, in which case Fedor is free, or they can pay him $100 to stay.”
Won’t work, and here’s why.
A shotgun clause really is a deal technique. Investopedia defines it as:
A buy-sell provision used by related parties in a business venture which gives an investor within the partnership the right to offer his/her portion to a partner at a specified price. If the partner does not buy the offered interest at this price, the partner must then sell his/her own interest to the offering party at the same specified price.
See the problem? The shotgun clause only works when the parties’ relationship ends after one tender. The UFC needs to keep Fedor around for a long time, so if they used a shotgun clause, Fedor could hold them up every fight. Sorry, Frank, but that puts us right back where we started.
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