It is impossible to make sense of the announced Nov. 2nd Bellator pay-per-view bout between Quinton 'Rampage' Jackson and Tito Ortiz without considering the role of former Bellator lightweight champion Eddie Alvarez.
If that sounds odd at first glance, it is. After all, what role could Alvarez, who is mired in his own legal dispute with Bellator, possibly play in a matter seemingly unrelated to him? The answer is that his current legal predicament is arguably the catalyst for the entire Bellator pay-per-view effort.
First, however, let's establish some context regarding Alvarez's predicament.
Alvarez has been locked in a legal dispute with Bellator after his deal with them was fulfilled following his final contracted bout, a win over Patricky Freire in October of 2012 at Bellator 76. Alvarez, then able to test the open market, received an offer from the UFC. However, Bellator's original contract allowed them, under certain conditions, the opportunity to 'match' any offers he received elsewhere.
Bellator eventually came forward with a counter offer, one they believe fully matched the UFC terms.They were able to mirror guaranteed monetary terms from the UFC: an eight-fight deal with a $250,000 signing bonus as well an escalating purse/win bonus structure kicking off at $70,000 for his first bout.
Yet, there was more to the story. Specifically, the issue of pay-per-view.
The UFC also included language giving Alvarez pay-per-view 'points', or the ability to make money off of pay-per-view sales. For example, according to the formula in the offer, an event that draws 400,000 buys would earn Alvarez an additional bonus of $200,000. That same formula also offers greater returns for greater sales, meaning if Alvarez were to be a part of an event selling one million buys, he'd earn $1.6 million in additional pay-per-view bonus money.
The UFC even went as far as putting in writing their intention, though no legal guarantee, of giving Alvarez an immediate title shot and placing him in the co-main event slot on the March 16th card headlined by UFC welterweight champion Georges St-Pierre vs. Nick Diaz. While no official numbers are available, the event is believed to have drawn 950,000 buys. Alvarez, therefore, would have earned approximately $1.4 million in pay-per-view bonuses alone had he fought on the card.
Despite this pay-per-view bonus opportunity from the UFC, Bellator still believes they've matched the offer. For starters, Alvarez's pay-per-view bonuses can't kick in until any event reaches 200,000 buys or more. While that'd be considered relatively low by UFC standards, UFC 161 in June is estimated to have done only 150,000 buys. Bellator's argument is that a) there's no guarantee UFC will place Alvarez on a pay-per-view event that can generate enough buys to cross the bonus money threshold, b) there's no contracted guarantee they'll place him on a pay-per-view event at all and c) Bellator is weighing the possibility of entering the pay-per-view market.
In other words, Bellator doesn't believe they have the legal obligation to match non-guaranteed, theoretical money, but if they choose to enter the pay-per-view space, they'd offer Alvarez identical terms. For their part, Alvarez and his legal team claim even if Bellator chose to stage a pay-per-view event, it'd be extraordinarily unlikely the Viacom-owned organization could even come close to generating enough buys to earn what would be possible under the UFC offer.
Fast forward to last night at Bellator 97.
Seemingly out of nowhere, Bellator - an organization still trying to claim their footing on Spike TV and one that is much more successful at discovering, developing and showcasing talent than acquiring it from the outside - announces a dramatic pivot. Not only would they be staging a pay-per-view event, the first in the organization's history, but that event would be headlined by two former UFC light heavyweight champions past their prime in Jackson and Ortiz.
Ortiz is 1-7-1 in his last 9 fights. He was recently inducted into the UFC Hall of Fame, but that was for work largely, if not exclusively, done from 1997-2006. Since 2010, Jackson has gone 2-4 in his last six fights and is on a three-fight losing skid.
Why, then, would Bellator move forward with this offering in this direction at this time? Strikeforce, for all their issues, only tested the already crowded and difficult waters of pay-per-view once early in their development and almost out of legal necessity. In fact, isn't Jackson vs. Ortiz a much more attractive proposition as a television rather than pay-per-view draw? People like free stuff often whether it has value or not. The bout would still have the drawbacks and issues it has otherwise, but giving it away for free on Spike TV would likely draw strong ratings and underscore their emerging stars in Michael Chandler or Pat Curran. The chance of drawing viewers for a less than optimal product falls, however, when placed behind a paywall even with a potentially relaxed price point.
Still, the decision to use former UFC stars to buttress the Bellator product is not so controversial. Rampage and Ortiz, in the right circumstances, still curry strong fan sentiment, at least relative to others on the Bellator roster. Using their popularity to enhance those on the upswing of their career is hardly malpractice. But the pivot to pay-per-view, particularly at this juncture in Bellator's development, is the truly curious decision. Bellator has had some success on Spike, but challenges, too. It's also a company designed with its week-in, week-out tournament format to deliver almost exclusively as a television product. That doesn't rule out a move to pay-per-view, but it's not unreasonable to wonder if a stronger anchor than Jackson vs. Ortiz should lead the way.
All of this is to say if the decision to stage this event now in this particular way doesn't entirely compute, it's because one can't make sense of it without considering how significantly Eddie Alvarez's case is forcing Bellator's hand. Absent his situation, the value of Bellator's push into pay-per-view is hard to understand.
With Alvarez as part of if not the context, however, the pieces began to fall in line. If he is able to extricate himself from his Bellator counter offer because a court decides pay-per-view offers, even if not guaranteed still count, how will they manage to hold on to their top talent when their contracts are up and the UFC comes calling? Bellator, it appears, needs to get into the pay-per-view space to prove they have some measure of viability there before Alvarez's case is fully litigated. There is no other obvious benefit for the move into pay-per-view at this time, especially with Jackson vs. Ortiz as an inaugural headliner.
For all of Curran's and Chandler's fan appeal, they have little hope at present of being strong pay-per-view draws. Jackson and Ortiz, in that sense, are much more of a sure thing. If Bellator can demonstrate in their first offering the ability to draw a strong pay-per-view buyrate (and there will be debate over what that figure is, but at a minimum has to be above 100,000), that could ostensibly provide them strong legal cover.
But there is risk there, too. What happens if Jackson, Ortiz and whoever else Bellator adds to the card fail to draw a sufficient buy rate? That, in and of itself, would damage their legal argument. Worse, there is no one else beyond Rampage, Ortiz and the organization's existing top draws who could do any better. If they can't get the job done for Bellator, who can?
There have been moments of frustrated outbursts from Alvarez since his legal dispute began months and months ago, but it's been relatively quiet recently. However slowly, litigation is still moving forward. The court of public opinion isn't as popular an outlet as it once was. Yet, don't be fooled by the physical absence of Alvarez in Bellator. His ghost is still there and arguably having a greater impact on the organization than his fighting ever did.