Promotion, fighter management firm merger raises conflict-of-interest concerns

An MMA promoter announced earlier this month that it has purchased a well-known fighter management firm, raising eyebrows about a potential conflict of interest.

Alliance MMA, the parent company of a group of regional promotions, acquired SuckerPunch Entertainment, which boasts such clients as Max Holloway and Carla Esparza, in January. Alliance recently became a public traded company with an IPO.

Though the same company or person being both a promoter and manager has been done numerous times in MMA going back years, there is a rule against it in Nevada, and the Ali Act extension to MMA, with legislation currently in Congress, forbids it.

The reason it is considered a conflict is layered. From a fighter’s perspective, if your manager worked for the same company as the person he or she is negotiating your contract with, how can you be sure you’re getting a fair shake? On the other hand, if you are not a client of the promotion-owned management firm, how can you be sure you’re being treated the same way as others who are clients?

That extends from money to matchmaking. It would benefit the promotion to give athletes under its managerial umbrella favorable matchups that would eventually send them on to bigger events, like the UFC. The promotion would financially benefit from that if owns the management company.

Rob Haydak, the Alliance MMA president, told MMA Fighting that his organization is combatting the conflict-of-internet concerns with full transparency. Alliance and SuckerPunch have come out and announced their new relationship. Nothing, Haydak said, is being done under the table.

“I think historically there’s been a red flag, because people sort of have taken the position that they do it behind the curtain, they don’t fully disclose to everybody involved what they’re doing,” Haydak said. “When we looked into management, we obviously took that into consideration. ‘What is the perception going to be?’ What I’ll say is that we’re taking a proactive stance. We’re saying, ‘Hey listen, we’re gonna get involved in the management game.’

“We’re very transparent. Number one, we’re a publicly traded company and number two, we have a moral obligation, not only to the athletes, but our shareholders and anyone involved with Alliance. We don’t see this as a conflict of interest, because we’re going to be completely transparent.”

SuckerPunch partner Bryan Hamper said less than 3 percent of Alliance fighters will be managed by SuckerPunch. Haydak said most contracts will be negotiated between the manager and the regional promoter, not Alliance directly, and there are already “parameters” regarding what athletes will be getting paid.

Hamper said that nothing will change from is company’s perspective and SuckerPunch will continue to put its clients first.

“I think everyone agrees on the regional level what fair-market value is for an athlete,” Hamper said. “We’re going to do what’s best for our clients, first and foremost. We’re going to work like we did before and battle to get everything for our guys done the right way.”

Haydak admitted that SuckerPunch athletes competing for Alliance promotions is not a big part of Alliance’s business strategy. Hamper said most of SuckerPunch’s revenue comes from fighters currently in the UFC.

“It’s no shock that the top five percent of our clients are making the lion’s share of that money, based off their UFC contracts,” Hamper said. “Our business is structured in a way that we are continually looking to build the next top prospect and get them to the UFC. That right now is where their bottom-line revenue is able to generate the most.”

The official Nevada Athletic Commission (NAC) rule for barring promoters “and certain others” from “holding certain financial interests” with a fighter is below:

An unarmed combatant may not have a promoter or any of its members, stockholders, officials, matchmakers or assistant matchmakers:

1. Act directly or indirectly as his or her manager; or

2.  Hold any financial interest in the unarmed combatant’s management or earnings from contests or exhibitions.

Haydak said Alliance has no promotions in Nevada, and if there comes a time when the company does want to promote in that state, it will not have any SuckerPunch fighters on the card.

“Whatever rules are in place, obviously we’re going to follow those rules,” Haydak said.

Same goes for the Ali Act if that gets passed by Congress, Haydak said. He said that it wouldn’t be that big of a deal for Alliance to not have SuckerPunch fighters on their cards, because it is such a small percentage of the fighters competing for Alliance.

Haydak said it’s for that reason why Alliance and SuckerPunch or not terribly worried about conflicts.

“Obviously that would have been a very valid concern and we probably would have taken a step back, but that’s not the goal of either company,” Haydak said. “It’s to get guys to the next level. To think, as a manager, that you can make a ton of money on the regional level is just really far-fetched.”