Okay, Michael first negotiates the exclusive contract, then when he comes back, the head of the cheerleader squad tells him that she has decided to send half the cheerleaders to Synergy.After she drops this bomb, she asks Michael "how do you feel about that?"
True, Michael has an existing exclusive agreement. We don't know if it is written, how strong it is. But even if it written, how can Michael enforce it for the following day's game?
This woman looked like she was sold on being "fair" to Allie, Michael's looking at a very difficult situation if she decides to send half the cheerleaders to Synergy. What is Michael going to do, file a lawsuit? That takes months. Meanwhile, Synergy gets half the cheerleaders.
So he negotiates her down to "one or two" cheerleaders to Synergy, that he will ask his boss about. The boss says no, and the head of the cheerleader squad has to call up Allie and tell her it's no dice. Effectively, Michael gradually brought her away from her position to that of honoring the exclusive contract.
I'm not sorry that Michael got eliminated, he's been sitting back and letting everyone else step for almost the whole game. But if I'm in Michael's shoes, I would try to convince the woman to send me almost all the cheerleaders, instead of getting tough. If you get tough, you might drive her over to sending Allie half the cheerleaders.