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Prominent MMA agent Malki Kawa on ‘The Art of the Deal’ for UFC fighter sponsorships
By Zach Arnold | August 11, 2011
Yesterday, MMA agent to the stars Malki Kawa did a fascinating interview with Mauro Ranallo on the radio (listen to it here). Malki was talking about signing a new deal for one of his clients and it let to a discussion about why he believes that agents should be asking big sponsors to include fighters in television & media commercials.
“The thing is I’m not going to sit here and say these companies are bowing down to me because that’s not the case. What’s going on is that I’m showing companies that there’s a real return if they get behind the fighter but at the same time I’m showing them how my fighter is going to get behind them. And if they’ll do certain things, I’ll make sure of other things and then, before you know it, okay, that makes sense, let’s do it. You know, Bud Light was its own thing. They were going to do a commercial with Jon (Jones) regardless.
“That had nothing to do with me but, you know, the K-Swiss thing, I remember when we sat down and we’re talking about it, my biggest thing was like, hey, look, I need him in these ads. I need to make sure that when you guys run something on ESPN this guy’s there. When you put in there with your next athletes, whether it’s I think last year they had (Jeremy) Shockey, if you guys put him with Shockey again, I need Jon Jones next to him, I want these guys. You know, when we do this deal, this is what it is and they said, look, that’s exactly how we intend to do it, we feel like he’s an elite athlete and that’s the way you know these guys need to be sold I think across the board.
“They’re not fighters, in my opinion. Fighting is just what they do. They’re athletes. Some of these guys can go play other sports. Some of these guys were wrestlers, some of these guys played football in high school, they did baseball, you know what I mean? So, all that stuff to me is like, you know, these (guys) are athletes. Just because one’s a football player or one’s a fighter doesn’t necessarily mean that they’re not an athlete.”
Mr. Kawa further elaborated on the landscape of corporate sponsorship in the Zuffa-dominated MMA landscape and how an agent should navigate the dangerous sponsorship waters. Mauro brought up Anderson Silva’s recently sponsorship deal with Nike and asked about the concept of Nike paying UFC a lot of money and having Zuffa distribute that sponsorship money to the fighters.
“Let me put it to you like this. First of all, when Nike comes and does that, it’ll be like it [is] in football. They won’t be giving money to the UFC and just cut it over to the fighters. The way it works in the NFL is they sponsor the NFL and the teams are required to wear the Nike uniform and then what happens is if they want a player to be endorsed by Nike, Nike will have to endorse them and pay the player separate. So when all these managers are sitting here saying that there’s a sponsor tax and this tax, well… you go to the NFL and see how well you do trying to get a guy a deal when he’s got a helmet on his head and at the same time the league is already locked up by a big sponsor.
“One day, you know, one day we will get Nike to come in or Reebok or Adidas or even a K-Swiss to come in and say, guys, how much you’re looking for? $5 million, $10 million to be your exclusive only sponsor in the cage and they’ll say yes and they’ll strike the check and before you know i,t if you want to walk down to that cage and you’re sponsored by whomever, guess what? You can’t do it any more and now you have to deal with these companies.
“And then in the NFL, some guys are sponsored by Reebok — but you look at those guys, their shoes are taped up, the guys that are sponsored by Adidas their shoes are taped up, their gloves are covered, you cannot put on the brands of other companies. And you know what? At the end of the day that’s how I’m kind of focusing and how I’m acting like in this business now. Why am I sitting here telling companies we need you to put a guy in a commercial? Well, because, in the NFL, how else do you sponsor a guy? Either you give him cash like $10,000 and you say here’s some merchandise and we’ll just use you on our web site, or you’ll go get the Terrell Owens of the league or Ochocinco or Peyton Manning and you’ll say, you’re going to be the guy for our commercial, you’re going to be the guy for this. We’ll do a Nike deal or listen, the league is sponsored by Nike, we’re Adidas, we’ll come and sponsor you but you’re going to be in our commercials and you’re going to be in our ads and every magazine in every store. Well, that’s how I think these guys should be done as well and I think that will happen.”
Malki also had some words of caution about the sponsorships that Anderson Silva’s camp has recently been touting.
“Congratulations to Anderson Silva. He got a deal, you know, a Nike deal from Brazil. It’s a different thing, it’s still not America, it’s not like the U.S.A. yet, but it’s a step in the right direction. They’ve been doing Nike deals in Japan for a very long time, Nike Japan has been sponsoring fighters and stuff like that, so it’s not the first time that Nike shows up on a fighter. But it’ll be a thing when you see Nike show up in America on a fighter on a card, you know, promoted in America where, you know, Nike USA as a whole the main corporation is behind it and is putting these fighters in advertising in American stuff, then you know we’ve made it as a sport.”
Do you agree with Malki’s philosophy in regarding to obtaining sponsorship deals for his fighters in this current business climate? Furthermore, if UFC was to get one main huge big sponsor, which company do you think would be most likely to take the plunge?
Topics: Media, MMA, UFC, Zach Arnold | 22 Comments » | Permalink | Trackback |
Pertaining to the previous article:
1) Of course PPV numbers are down. The PPV’s haven’t been very good. We will get to see how Jones/Rampage, GSP/Diaz, and a LW/FW combo PPV’s do in the future to really determine if there is a downward spike. That will be the better indicator. Personally, I believe the popularity has stopped and potentially decreased a tiny bit. But the sport will still be fine.
2) I’m waiting on the UFC to determine what I will do with my TV situation. Sports are the one thing that makes it harder to cancel cable. Personally, I would rather just buy the events ala carte. $10 for a fight night, $5 for a prelim show. It would save me serious money in the long run. Even with the Yankees I don’t need the YES Network much anymore. A game a week is on a local channel. ESPN3, which is available online, seems to have a game about every week and a half for them. And FOX has a few games as well. Satelite and the internet is certainly the future.
As for this topic…
1) He makes a great point about the NFL. Every league restricts what an athlete can wear and makes money on sponsors themselves. The UFC is more like the European sports, where athletes have big advertisements on them.
2) The UFC already has Bud Light, Dodge, Burger King, Harley Davidson, and a few others. They also get the major movie of the month from the studios. The next step is getting big time clothing companies, white collar advertisers, or maybe even something better then “boost mobile”??
Two other interesting tidbits I’ve noticed lately in the MMA World…
1) If you read between the lines of Bas Boon talking about the GG/Zuffa issues…. There really are no money marks left. Just a week agao Alistair Overeem was saying that he also wanted to be able to fight elsewhere. Now Bas Boon is saying he can be UFC exclusive. Bas Boon is also saying paying the fighters directly is not an issue anymore. This isn’t a guy coming from a position of power.
One benefit of the Zuffa purchase, besides having all of the top fighters under one umbrella…. Is that the era of fighters going from sport to sport or organization to organization is basically over. It will not resemble the other major sports in America where if you are signed the majors, nothing else gets in the way of you competing there.
2) T Jay Thompson interview where he talked about how Pro Elite wanted to start slowly, likely without titles, and grow organically. I was rather shocked when Thompson was associated with bringing Pro Elite to Showtime in what now looks to be a bogus report. Thompson has been around far too long to make a rookie mistake like that.
As much as Showtime seems like an attractive option for a small time promoter, it’s sort of a death trap. Strikeforce expects the promotion to compete with the UFC. Showtime signing on Fedor Emelianenko was a sign of this. And yet they don’t pay enough money to really make that promotion on a contender. So what you end up getting is a sitting duck promotion that is forced to go to war with the UFC, without the money backing to do so.
If Thompson was smart…. And made the right decisions…. He wouldn’t compete with the UFC. But he would do the next best thing. He would become the best feeder system for them. He would cultivate talent through tournaments. Get the fighters the experience.
That is the niche the sport needs the most right now. We don’t need to see guys with 5 fights in the UFC in a sink or swim circumstances. We need to see the fighters getting 10 to 12 fights before they even think about signing on in the UFC…. And I believe Thompson might be in the best position to make that happen.
Only time will tell if he goes that route…
I should also add to the GG/Overeem point, that I do expect Alistair Overeem signed to the UFC by the 1st quarter of 2012 at the latest.
And if he is not signed, it’s likely because GG did something so bad that Zuffa feels they can’t trust them enough to get in business again, no matter how iron clad the contracts are.
And that sort of stuff can happen in business. It should be interesting to see how bad of a taste in the mouth Fertitta got. He might feel that he has no faith in their word…. And that might be that.
But none of us could know that…
Definitely agree Zach. Malki spelled it out in very clear terms, and his comparisons (while not being completely accurate) were valid.
Just as in the 4 major sports, you have to deal with the main league/promotion to be able to sponsor the athletes.
The one difference is that in the other majors leagues, thanks to collective bargaining, when they deal with the league you are also cutting in the rank and file players.
It is also worth noting that the argument for low pay in MMA has been that it is offset by endorsements. It has often been claimed that fighters make more from sponsors than fight purses. But with the exception of the few fighters with high Q ratings those days are done. The t-shirt industry. the biggest sponsor, has seen a huge decline: last year Affliction cut the number of fighters they sponsor by half and is now transitioning out for boutique fashion, all the ABG brands (Tapout, Silver Star) look to be withering, and Headrush isn’t paying people. Add in the fact that these companies look to be moving sponsor money away from MMA and towards other athletes in the NFL, NBA, etc. And the companies still putting big bucks into it – MusclePharm – are seeing no return on their investment and will probably burn out shortly.
And for the prelim fighters in the UFC its going to worse. Thanks to the sponsor tax it is a buyers market, as the few companies who are able and willing to pay the tax have their pick of the fighters who can no longer get the mom and pop vendors on board.
See i see it as two different discussion though.
In my opinion, the fighters inside the UFC aren’t getting a fair cut of any of the profits outside of fighting (or there either). However, that is on the fighters themselves to come together and one: bargain effectively for a share of those profits or two: strike (at an impactful moment).
Zuffa has built the UFC from bankruptcy to a billion dollar company. I don’t see any problem with them excluding certain sponsors, and charging a fee to show at events.
I agree with that breakdown. My comments were directed to the nameless masses that are convinced there is big money for fighters in sponsorship. Probably not necessary for the commenters on this site.
“In my opinion, the fighters inside the UFC aren’t getting a fair cut of any of the profits outside of fighting (or there either).”
What percentage of the profits outside of fighting are fighters receiving?
I don’t mind lower end fighters not getting an extra piece of the pie. But I would like to see some base pay limits put in place.
Does the #25 guy on a baseball team get any money outside of his salary or bonuses earned for making the playoffs? I don’t know the answer to this one. I always assumed they did not.
The problem I think is there is that the contracts aren’t structured in a way that bumps up pay based on where fighters are on the card.
The top guys will get great deals no matter what. But if Chris Lytle main events an event, there should be an added bonus in his contract for that.
If Phil Davis fights for the title in 2 fights, there should be an added bonus, including part of the PPV sales. And also part of the DVD sales and the digital downloads and so forth….
That is the real benefit of a fighters union in my opinion. That fighters pay should directly and instantly correspond to the level of fight they are in at all times….
What I meant by that was profits from, advertising dollars, likeness rights on video games (among other things), and things of that nature. I don’t believe they’re getting anything right now from those things, but I could be wrong. If they are getting anything it’s definitely very small though.
http://fcfighter.com/post/tv-producer-auctioning-m-1-global-master-tape-library-on-ebay-says-promotion-owes-him-over-50k
Jerry Millen is owed over $50,000 by M-1, so he is auctioning off the MASTER copies of some of their events.
“What I meant by that was profits from, advertising dollars, likeness rights on video games (among other things), and things of that nature. I don’t believe they’re getting anything right now from those things, but I could be wrong. If they are getting anything it’s definitely very small though.”
In other words, you have no idea if fighters get a cut of the profits outside of fighting, but you’ve decided that they probably don’t, and that if they do it’s probably too small.
And you’ve provided no evidence that they do, and decided to pick an argument. That’s cute.
The fact that the biggest star of the company (Brock Lesnar), gets no revenue from advertising dollars probably means that nobody gets it. We all also know that the contracts given out for video games likeness rights were garbage, and lasted a lifetime (AKA made this fact public). The only reason they took them was because they were gonna be cut if they didn’t.
I’m not the one making assertions. You made a positive assertion that UFC fighters aren’t getting “a fair cut” of profits. You don’t know what the UFC’s profits are, and you don’t know if or how much of a cut UFC fighters get, so what grounds do you have to make such an assertion?
You’re right, I’ve provided no evidence that they do, because just like you, I don’t know what their profits are or what cut the fighters are getting, so I don’t know if it’s fair or not. The difference is that I’m not making an assertion that it’s fair – I’m just questioning your assertion that it isn’t. The fact is that neither of us has any idea, and neither of us has any real evidence.
No I just provided you examples of “real evidence” in two seperate situations. You just chose to ignore it because it took away from your “no evidence” complaint (or whatever it is).
You’re right, I have no idea how much the UFC actually profits off of ad revenue, or the millions of copies of UFC undisputed 09-10 that were sold. I just know that there are very few fighters who clear $1 million a year off of income from the UFC, and that last year alone the UFC brought in close to $350 million.
How do you know they brought in $350 Million. just curious where this number is coming from….
Shit, that was supposed to be $250 million. Sorry.Forbes Business.
The Sports business Journal estimated it at $400 million annually.
“The fact that the biggest star of the company (Brock Lesnar), gets no revenue from advertising dollars”
That’s a fact? What’s your source?
“We all also know that the contracts given out for video games likeness rights were garbage, and lasted a lifetime (AKA made this fact public).”
They made the fact that they lasted for a lifetime public. I don’t recall ever hearing them say how much of a cut they got. If you know differently, I’d like to hear it.
“You’re right, I have no idea how much the UFC actually profits off of ad revenue, or the millions of copies of UFC undisputed 09-10 that were sold. I just know that there are very few fighters who clear $1 million a year off of income from the UFC”
Really? How do you know that, exactly?
“That’s a fact? What’s your source?”
Brock Lesnar himself.
“Really? How do you know that, exactly?”
The internet.
“Brock Lesnar himself.”
When? I’ve never heard him say word one about what he gets money for and what he doesn’t.
“The internet”
‘The internet’ has no idea how much most mma fighters make.
“When I looked down, I saw that big Bud Light logo, and all that went through my mind was how much money UFC was making on that sponsorship, and how much I wasn’t”
-Death Clutch: My Story of Determination, Domination, and Survival By Brock Lesnar, Paul Heyman
As for how much fighters make, I have an inkling what some are making and it is no where near the $75 million that the Zuffa S&P statement show the owners are paying themselves annually.
Do I begrudge them for making that much? No, but I am amazed how much fans want to delude themselves that their isn’t some incredible disparity taking place.
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