How the Zuffa lawsuit against Bellator and Ken Pavia brings back memories of TNA's early woes

With the UFC and WEC's parent company Zuffa LLC filing a lawsuit against The Bellator Fighting Championship and agent Ken Pavia that alleges corporate espionage, I'm reminded of a similar story from 8 years ago (which is also covered in great detail in Jerry Jarrett's book about the early history of TNADerek Burgan's review of the book is also worth reading).  When TNA first launched with its $9.95 weekly PPV concept (in lieu of trying to secure a national TV deal in some form), they hired PPV consultant Jay Hassman (referred to as "Jay Haussmann" in Jarrett's book), who was a Vice President in WCW, running their PPV department.  At the same time, Hassman was working for Team Services, which worked with WWE in distributing their Fanatix PPV series, but TNA didn't know that.

Hassman apparently told TNA that he had cleared them on Cablevision (where he had previously worked as corporate director of Pay Per View/New Media Marketing) and Dish Network, among others, when he had done no such thing, leading to TNA wasting money on pointless ads.  Some cable systems carrying the shows never got any marketing materials.  He told them that projections suggested that they were getting 80,000 buys per show as opposed to more realistic 10,000-25,000, with a press release from PPV distributor iNDemand backing up the numbers in a mystery that's never been solved.  Early projections sent to TNA on iNDemand's letterhead were forgeries. The shows were budgeted for 50,000-100,000 buys based off the false projections.  Within TNA, there was a belief that it was engineered by WWE after finding out about the Team Services connection.  On July 30, 2002, TNA sued Hassman:

J. SPORTS & ENTERTAINMENT LLC FILES LAWSUIT AGAINST MARKETING & PPV CONSULTANT

Consultant Did Not Disclose Relationship With World Wrestling Entertainment


NASHVILLE, Tenn., July 30 /PRNewswire/ -- J. Sports & Entertainment LLC (JSE), announced today that they have filed suit against Jay Hassman, BTP Consulting, Len Sabal, Hassman's associate, and K-4 LLC for fraud and breach of contract with regard to their marketing and consulting services for NWA-TNA: Total Nonstop Action, the new weekly pay-per-view wrestling series.

JSE terminated their professional services agreement with Hassman and BTP Consulting on July 15, 2002. The suit, filed in Circuit Court for Davidson County, Tennessee, alleges Hassman conspired to defraud JSE by concealing pertinent information necessary to JSE's business operations.

Specifically, the complaint alleges that Hassman failed to disclose his affiliation with Team Services, a company which markets the competing World Wrestling Entertainment (WWE) pay-per-view programming. The suit further contends that Hassman conspired to defraud JSE by providing false information about the extent of marketing of the NWA-TNA pay-per-view programs, the availability of the NWA-TNA pay-per-view programs, and about the actual number of pay-per-view buys for NWA-TNA.

J. Sports & Entertainment LLC recently launched the NWA-TNA: Total Nonstop Action pay-per-view wrestling series that broadcasts live every Wednesday night. The series represents the first weekly original programming available exclusively on PPV. For more information on NWA-TNA: Total Nonstop Action, log onto http://www.nwatna.com.

SOURCE: J. Sports & Entertainment LLC

Jerry Jarrett was interviewed by Jess McGrath of 1Wrestling.com (co-owned by TNA's Bob Ryder) that day, and gave more details about the situation.  The interview is available via Google Cache for each page individually.  The story quietly disappeared until it was announced as being settled about a year later in a press release from Hassman:

July 16, 2003….. It was announced today that the action commenced by J. SPORTS & ENTERTAINMENT, L.L.C. ("Plaintiff" or "JSE, LLC"), against JAY HASSMAN, BTP CONSULTING, LEN SABAL and K-4, L.L.C. (collectively the "Defendants") on July 30, 2002 in the Circuit Court of Davidson County, Tennessee, which was removed to the U.S District Court for the Middle District of Tennessee, Nashville Division, on August 30, 2002 as Civil Action File No. 3:02-CV-00853, has been resolved and fully settled by the Parties.

Today's joint announcement by Plaintiff and Defendants states that the Parties agreed to settle and compromise the litigation through a "mutual walk away," with no settlement payments by any Party, and to dismiss with prejudice all claims and counterclaims in the litigation.

The announcement also notes that, "This [Settlement] Agreement and any proceedings taken hereunder are not and shall not in any way be construed as or deemed to be evidence of or any admission or concession of wrongdoing or liability, or an admission of the truth of an, or an admission of the truth of an fact, on the part of any Party, their counsel, or any of them, which liability is expressly denied and disclaimed by each of the Parties."

No additional information or statements regarding any of the claims, counterclaims or the like at issue in the litigation shall be available in the future from any of the Parties, their agents or related entities.

A month later, Hassman released a bizarre, rambling statement about the suit:

He said, she said, paranoia reigns, one impugns, another seconds, a rumor is suddenly verified as truth, all spirals outward, everybody's living in fear, disaster's on the horizon, anger, hatred is incited from within, as with venomous "leaks-scoops" with "5-minute-later 1wrestling.com exclusive extensive interviews" (read in actuality, diatribes), manipulative, scandalous follow-ups, mixed with rumor-mongering and not only attempted character-assassination, but also highlighted by threats of death by shooting...
All this, just because some people don't understand, won't listen, and regardless of how many times things are explained, "just don't get it!"

Don't get it, misinterpret, cycle bad info in-house, get confused, lose focus, strike out helter-skelter, and when all else seems incomprehensible through a blood-wrenching fog of self-deception, scream, "GET THE LAWYERS!"

Time for a reality check, guys.

Better yet, let's try for a couple of reality checks, all centered on the infamous complaint impetuously filed by JSE and destined to become a laughable classic in the cable and PPV business and its workings...

So what's it all about, Alfie??

Try this for starters: -- No wrestling-exclusivity in agreement. (If so important to JSE, why wouldn't they include it in the agreement they prepared, especially since they "say" they obtained it verbally?) --No mentions of any restriction on other business activities. --Absolutely no mention of "100% of all Hassman's time just for JSE". (Don't have to look to far to find that quotee..or is it "quotor".. "quoter," or just elder JJ?)

More revealing, though, are these tidbits: The first three-and-a-half-months were spent by Len Sabal successfully negotiating and concluding the iN Demand agreement for the industry's first weekly, primetime, year-long PPV series. But guess what???)... JSE now says they never even knew Len was "JSE's guy," didn't know that Len was conducting the negotiations on their behalf, (despite paying Len's LA and NY travel, lodging, entertainment and related expenses for iN Demand contract meetings, and despite Jeff and Jerry's late night calls by JSE to Len, "Where's the termsheet?", "When will we know if we have a deal?", "When will we know what night of the week we'll have?", and apparently never even seeing Len's name next to theirs on the drafts and executed iN Demand agreements as a Party for Notices.... Three and a half months of high intensity efforts, concluding this first-ever deal that any other PPV programmer will tell them is a GREAT deal for JSE.. and JSE has the gall to allege Len is "incompetent" in their "complaint," just because they still don't understand the business despite the repeated lessons and explanations, and because they think they can drag Len into their tortuous-web of persecution via prosecution.. (Or as others more cynically note, "Or just don't want to honor the agreement now that they've got the deal.. maybes more so because they're behind the eight-ball.) Either way, it's ludicrous to label a major success the work of an "incompetent," but indicative of the thought processes that have taken hold.

And still not even understanding what they signed with iN Demand. Like exclusive distribution and sub-distribution rights, meaning (duhh) In Demand has the rights and obligation for licensing all other cable and satellite platforms, like TVN, including Cablevision, DirecTV, EchoStar, Canada and others. Let me say it again, when JSE signed the iN Demand agreement, they granted carriage negations and rights to iN Demand. But, says JSE in their "complaint," that afterwards those and other rights were taken away from iN Demand..Yeah, like iN Demand was just oh-so-happy to get the JSE project off their plate, probably because they were just too, too tired from the exhaustive 3.5 month contract negotiation with mean ol' Len that got them all worn out and ready for a nappy in the afternoon. Right. And Santa lives in Nashville.

Ditto JSE's absolute absence of knowledge of the process of affiliate marketing, how it's done, who does what, and how their claims that affiliates never had NWATNA marketing kits and video spots is a laughing matter among the many thousands of cable personnel that have had each and every ad slick, reprint, background document, press release and video spot at their fingertips when they needed it. In their claim, they moan and groan that 1900 press and marketing kits, complete with video spots, were never sent to the iN Demand and DirecTV affiliates..but they think that somehow that was to be done without any consideration for even the thought of cost that would be incurred with such a backward method...Let's see, $18 a kit with slick, repros, color slides, background docs..for 2000 systems (gotta have additionals just in case) for $36,000...Plus 2000 monthly :30 and :60 spots, at $4 a pop, for another $8,000...plus two-day express (needed for tracking purposes) at $14 per or $28,000, and so "YEAH, GUYS, LET'S BUDGET $72,000 A MONTH TO SHIP THIS STUFF TO THE SYSTEMS." Right. And Santa skis in Nashville, too.

SPEAKING OF BUDGETS: Didja hear the one about 720 to 540 to 350 to 250 to 170 to 136.5. K, that is.. As the NATIONAL MEDIA BUDGET FOR THE GRAND INTRODUCTION TO THE ENTIRE UNITED STATES POPULACE OF THIS'HEYRE GREAT NEW THING???

But that's a matter for the NEXT STATEMENT, According to Jay..We'll call that one NUMBER TWO, and it's coming your way soon, so stay tuned for more loony times.

PS: No telephone calls, please. My lawyers say nothing but prepared statements in order to prevent any more "downright consternation crisis creations." PS: Email any questions to me and I will answer only those that counsel says I can.

Jay Hassman

After this, the story pretty much disappeared into the annals of mostly-forgotten wrestling history...

...until Hassman was arrested in 2006 on four felony counts: Two counts of Possession of a Forged Instrument, one count of Grand Larceny, and one count of Falsifying Business Records.  He pleaded guilty to two charges the following year, and then...well, keep reading (free subscription required to view link):

In May 2007 the defendant pleaded guilty to grand larceny in the second degree and falsifying business records in the first degree in connection with the theft of the sum of approximately $135,000 from his employer. The plea was entered upon a promise that the sentencing court would sentence the defendant to a term of probation of five years, to run concurrently with a term of incarceration of no more than 30 days, restitution in the sum of $135,000 with an "up front" payment in the sum of $65,000 to be made prior to sentencing, and "possible fines." At the plea proceeding, the court warned the defendant that, if he violated the conditions of the plea, it would not be bound by its promise, and the defendant would be "looking at possible upstate time in jail." In September 2007, four months after the defendant pleaded guilty, but before he was sentenced, the defendant was named in an arrest warrant issued in the Commonwealth of Pennsylvania, based on an alleged larceny occurring in April 2007, one month before the defendant pleaded guilty in New York. As a result of the warrant, the defendant was remanded to the custody of the Nassau County Sheriff on September 28, 2007.

When the defendant appeared for sentencing, the People alleged that he had violated two conditions of the plea agreement, specifically, that he was arrested pursuant to the Pennsylvania warrant and that he failed to make the "up front" restitution payment. The defendant responded that the matter in Pennsylvania was civil in nature, and that some restitution had already been made in that matter. He further claimed that he and a business partner had been trying to arrange a line of credit to allow him to pay the restitution in this case, but his remand on the Pennsylvania warrant had prevented him from obtaining that line of credit. Without specifying the condition it found the defendant to have violated, the court announced that its promise with respect to the sentence to be imposed upon the defendant was "off," and it sentenced the defendant to an indeterminate term of imprisonment of 2 to 7 years, a fine in the sum of $5,000, and restitution in the sum of $ 135,000. The court denied the defendant's application to withdraw his plea of guilty. We modify.

A court may impose an enhanced sentence for a defendant's failure to make restitution prior to the sentencing date, as specified in a plea agreement, if the failure to make the restitution was willful (see People v Bassoff, 51 AD3d 682, 683; People v Birch, 35 AD3d 1026). On the other hand, where the defendant's failure to pay the stipulated amount of restitution within the agreed time frame was not willful, and the defendant seeks to withdraw a plea of guilty rather than accept an enhanced sentence, the court must either extend the time for the payment of the restitution or grant the defendant's application to withdraw the plea (see People v Almo, 300 AD2d 503, 504). Willfulness may be found where the defendant is able to make the restitution as ordered by the court, but refuses to do so, or where the defendant fails to make sufficient bona fide efforts to obtain the resources that would allow compliance with the restitution order, or where, in the first instance, the defendant agreed to pay the restitution in order to obtain the benefits of a favorable plea, but knew at the time that he or she would very likely be unable to satisfy the obligation (cf. Bearden v Georgia, 461 US 660, 667-668; People v Amorosi, 96 NY2d 180, 184).

Here, the court did not conduct an inquiry into whether the defendant's failure timely to make the "up front" restitution payment of $65,000 was willful, and did not have sufficient information before it to make that determination, especially in light of the defendant's unchallenged claim that his remand had prevented him from obtaining the line of credit that would have allowed him to make the payment. We, therefore, vacate the sentence imposed upon the defendant, and remit the matter for a resentencing proceeding, at which the defendant is to be given an opportunity to withdraw his plea of guilty upon a showing that his failure timely to make the $65,000 "up front" restitution payment was not willful. Should the defendant fail to make such a showing or choose not to seek withdrawal of the plea, the court may reimpose a sentence that includes a term of imprisonment.

In light of our determination, we need not address the defendant's remaining contentions.

His subsequent appeals have been denied.

In an interview with Wade Keller earlier this year, Eric Bischoff, who served as Hassman's boss in WCW and had just recently become TNA's...something, gave his thoughts on the whole mess:

Keller: I’ll say in fairness to Jerry that he believes Jay Hassman lied to him about what the revenue would be in those early weeks and months, so he overspent based on anticipating that revenue...

Bischoff: ...In other words, this guy who’s supposed to be a wrestling executive and a really smart guy and holds himself out there to be one of the smartest guys in the history of professional wrestling let some potato head like Jay Hassman convince him of something that he should have known himself. That right there, I think, is a perfect frame for what Jerry Jarrett really is. He’s an idiot. In terms of the wrestling business—maybe he’s a genius in the construction business—but this is a guy that ran a small time territory back when regional territories were relevant who didn’t have any concept at all of a national television platform. He had no understanding at all of what pay–per–view was like. Otherwise he would have never hired or listened to Jay Hassman. He, he... (laughs)... he is what he is. He should have been promoting small regional wrestling events in Memphis and stayed out of businesses he really didn’t understand. Which is I would have rather painted houses and dug ditches than go to work for Jerry Jarrett.

And that's about it...for now...

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