By Zach Arnold | May 14, 2015
— Deadspin (@Deadspin) May 13, 2015
It started years ago with UFC slapping a “sponsorship tax” on companies who wanted to sponsor individual fighters. The idea was that UFC had a right to get paid for creating the stage for advertisers to market their products to the masses. The idea was also couched in terms of protecting fighters by weeding out deadbeat companies.
Then it morphed into rumors a couple of years ago of UFC creating fighter uniforms in order to control sponsorships.
It’s now morphed into UFC inking a corporate deal with Reebok. It was supposed to revolutionize fighter sponsorships and make UFC a ton of coin. Instead, the UFC/Reebok partnership merely became a pretext for all of the major economic problems between management, fighters, and managers to rise to the surface for all the public to see.
In short, the Reebok sponsorship is being treated as rotten in the court of public opinion by everyone except UFC. The fruit from a poisonous tree.
We had the anti-trust lawsuit filed in San Jose against UFC. Fighters uncharacteristically spoke out in protest of the new proposed pay scale by UFC in regards to how much Reebok money they would get. The protests escalated thanks in part to fighters no longer being able to cut their own nickel-and-dime sponsorship deals. The protests claimed that their nickel-and-dime deals have been reduced to penny-ante Reebok payoffs.
MMA managers are now screaming from the mountain tops about some sort of symbolic meeting of the minds to figure out what to do now that the UFC/Reebok deal has cut their cash. And for managers like Monte Cox who actually understand the MMA industry and do a professional job, their only option is to deepen their business relationship with Bellator. Viacom is laughing right now.
Fighters are now claiming on Twitter that UFC is only allegedly starting to make phone calls to determine how much fighters are going to lose in cash thanks to the newly instituted Reebok sponsorship deal. Restraint of trade?
In a great MMA Fighting article by Marc Raimondi, this passage raised a lot of eye brows:
Not every manager is against the Reebok pay structure. John Fosco of VFD Marketing, who reps the likes of Travis Browne and Clay Guida, is firmly behind the UFC. He doesn’t believe fighters should have ever had the ability to get their own in-cage sponsors, since the fights take place on UFC television and pay-per-view. He calls the UFC allowing it for so long “a gift.”
Whatever happens in regards to a fix or a remedy between fighters & UFC on the Reebok sponsorship, one thing is very clear: the damage has been done to UFC’s corporate image. This is an organization that, as Jordan Breen of Sherdog rightfully points out, has never been able to fully control a media narrative. Strong-arming media writers is one thing but controlling an actual narrative is another. Part of this is due to the fact that UFC’s audience is largely made up to 18-to-34 year olds who are active on social media and will not hold back their opinions. They’re impatient, cynical, and aggressive.
If you’re a major advertiser who is interested in reaching out to UFC’s key demographic, the public relations carnage Reebok has had to endure will make you take a step back before considering investing money in the MMA sphere. It’s enough to plant seeds of doubt. Reebok has been getting trashed despite the fact that they have no control over dividing payouts to various fighters. Reebok thought they were getting a very affordable deal with a lot of upside. They’re getting hammered before the deal has even been implemented.
This house of cards is all of UFC’s making. If you’re a prospective sponsor, why in the world would you want to put your proverbial hand in the blender and be at the mercy of angry fighters, managers, and fans? The UFC’s struggles in protecting Reebok’s image since the sponsorship deal details were announced must be very concerning for the parties involved.
— MMA Supremacy (@MMASupremacy) May 13, 2015
When you live by the sword, you die by the sword. UFC will continue to remain profitable while remaining a sports property on the outside-looking-in as far as gaining mainstream marketing appeal. At some point, current ownership will cash out when the headaches become too great. It is my opinion that this will happen sooner rather than later.