Business can get ugly, and for Bellator and its majority stake owner Viacom, that ugliness is taking the form of a lawsuit.
The facts are thus:
- In 2009, a Turkish investor sunk $1 million into the fledgling promotion.
- Eventually, Viacom bought out most of the company.
- Now, that Turkish investor is claiming that Viacom is acting in their own best interests and not Bellator’s, and that’s hurting what could be a healthy return on that initial investment. For example, they don’t like that Bellator events went from weekly to once a month, as they feel that that is cutting into revenues.
Here’s the Hollywood Reporter with the details of the suit:
In May, the plaintiff says it finally got financial statements from Viacom, and according to the complaint, the documents “only highlight Viacom’s failure to pursue all profits Bellator would be entitled to if Viacom had been acting in Bellator’s interests rather than its own.”
Viacom is alleged to be causing damage to the league by causing one of its subsidiaries to divert revenue tied to in-show sponsorship integrations. A licensing agreement provides that Bellator is to get 50 percent of “advertisements that integrate multiple methods of promotion, such as televised commercial break advertisements combined with in-show logo placement on cage mats,” but the lawsuit implies that Viacom is structuring these ad deals in a suspicious fashion.
“Using its wide range of business interests, Viacom is able to divert income to its affiliated companies while purposefully obscuring the terms of these advertising contract,” states the lawsuit. “By doing so, Viacom can retain all revenues within its empire while depriving Bellator and its minority members of the significant revenue that is diverted to its other business interests.”
The plaintiffs are asking the judge to compel Viacom to buy them out or dissolve the company.