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Not the kind of media storyline UFC wanted heading into this weekend
By Zach Arnold | July 6, 2009
The buzz about UFC reportedly wanting $100,000 per six months from sponsors before they can even negotiate with contracted fighters is not dying down (and for good reason). It should be pointed out that the fee demanded by UFC is for sponsors who want their logo or trademark to appear on fighters or be promoted by fighters during UFC telecasts.
Josh Gross in Sports Illustrated puts it this way:
For the UFC, according to sources familiar with the company’s thinking, motivations are simple: the promoter wants its share, which it believes it earned by providing the platform for fighters to make significant sponsorship dollars; protection for official sponsors, such as Bud Light and Harley Davidson; additional control over brands gaining exposure to UFC audiences; and to further marginalize MMA agents and managers.
MMA Payout has more thoughts on what UFC is doing with fighters and their ability to have sponsors.
Topics: Media, MMA, UFC, Zach Arnold | 47 Comments » | Permalink | Trackback |
Sponsorship taxes are no differnt from any other major sport league (NASCAR, F1, NBA, MLB, etc).
The UFC is a tier 1 platform for MMA, especially when it comes to brand value. Like every other major league sport, sponsors are the customers since they buy services for prestige brands(such as advertising space on a Ferrari F1 racing car that costs 50+ million a year). For the sake of comparison, imagine what would happen to the reputation of a grand hotel, such as the Savoy or the Dorchester, UK, if it slashed its room rates from £400 per night to £40 per night.
The UFC is growing their brand by taking their sponsorship platform to the next level. If they want to be seen as major advertising venue for potential sponsors (fortune 500 companies), it’s time for them to weed out the little guys and start accepting bigger sponsors with real credibility. It makes business sense to dump “Condom Depot” for a potential sponsor who can afford to enter, like “Adidas”.
Quite simply not a fair comparison at all. It is quite different from the NBA, MLB, and the like. In the league sports, the sponsorship dollars are split between players and owners, with the players taking over half of the combined revenue.
Rob,
Not a fair comparison either. Those sports leagues are over 50 years old and took generations of athletes to get to that point. The UFC under the Fertitta’s isn’t even 10 years old.
The story has no impact on UFC 100. It isn’t getting any main stream coverage outside what MMA fans typically view.
And I think Lester is correct on this. I’m not so sure that the $100,000 is really a way for the UFC to line their pockets. I think it is a way to say: “We don’t want your local tiny brand on our telecast”.
Fair point in some ways, but not in others. It did take the other sports 50 years–but during that time, the other sports were barely profitable. Not so with the UFC–it is wildly profitable.
I agree–the impetus isn’t really the $100k–agreed.
I’m sure the marquee sponsors the UFC is after also want to be in good company as well. Small sponsors are not the future of the UFC, this was bound to happen at some point. $100k is really just like a membership fee.
It also helps the UFC test the waters and gather all sorts of new feedback based on another pricing scheme.
I don’t see how tis is an unfair thing for the UFC to do. Its their air waves, if they want to charge a fee its their right. Seems like a people desperately trying to dig up a scandal.
It’s just weird because in the past the poor pay has been excused by how much fighters get from sponsors. When people complained about some guy getting 3k/3k, others said, “yea well he’s taking home 20k worth of sponsorships.” This really hurts the little guy in the short term.
In the long term, I see this as a way of UFC further trying to eliminate fighter management. They will broker sponsorships for the fighters, keep the lions share and let some trickle down to the fighters. The fighters won’t have any choice to complain cuz its simply a matter of getting paid or not.
UFC is well within their rights. UFC contracts state that UFC can approve or deny sponsors at it’s discretion. UFC could just say flat out no toall the nickel and dime sponsors. Here they are putting it on all the small fries, “ok you want to sponsor ages fighters and be seen by a couple million peopl pay us. If not go away.”. I makes he sponsors the bad guys not UFC.
Naturally guys will still be upset with UFC but it diffused the criticism a bit by giving sponsors the option to buy in. Even if the buy in is high.
It sucks but in the end, it is completely fair! UFC built their brand and as sole owners of their promotion/broadcast, decide what goes in it.
Fighters’ union and this would never happen… but Chuck and Randy, and Rashad and Rampage, are making the big bucks, and to a certain extent, respectively deserve those big bucks; so what is stopping the fighters from unionizing? In my opinion, the greed of small group of individuals, effects each fighter equally as much as the greed of the promoters.
Just my thought. Any takers?
Talk about the Video Game threat people!
“Causing a stir over the weekend were rumors — now confirmed by SI.com — of the UFC’s attempt to make it difficult, if not impossible, for fighters to sign a licensing agreement that would put their likeness in the recently announced “EA Sports MMA” title, which is set for release next year.
Beginning the week before July 4, UFC matchmaker Joe Silva, at the behest of Dana White, called managers with this message: If you’ve been in the UFC and think maybe you want to come back someday, or you haven’t had the pleasure and plan on fighting in the Octagon, you better not sign that EA licensing agreement.
White is said to be adamant that aligning with EA is no different than declaring war on the UFC and its wildly successful THQ-produced UFC 2009 Undisputed, which sold more than a million copies in its first month. Fighters, from world-class to journeyman, were told the prudent choice was to decline money offers from EA — deals with fighters on the level of Jason “Mayhem” Miller, Nick Diaz, Mo Lawal and Jake Shields, range from $5,000 to $15,000 for a one-game, two-year nonexclusive deal, according to multiple sources.
In Miller’s case, potential consequences weren’t enough to prevent him from aligning with EA, the middleweight told SI.com. However other fighters, such as Nathan Diaz — who avoided signing UFC’s exclusive licensing game agreement with THQ, which provides most fighters with zero compensation and was at the center of the controversy that saw Jon Fitch banished from the UFC for 24 hours — decided against participating in the EA sports title, according to his management.”
From Luke Thomas over at Bloody Elbow:
“This might be a scoop. I have on very reliable word that Tapout asked for this and the UFC wants to distance itself from the CondomDepot.com’s of the world. Those are the two reasons stated to me.”
Also there is nothing preventing fighters from endorsing companies that don’t pay the UFC fee in magazines, online or on TV commercials. This just says the fighter can’t have the logos on shirts an shorts.
Mr. Roadblock, you are absolutely correct. I hate how most “journalists” are spinning this as “UFC wont let fighters have sponsors”. They can be sponsored in by many companies in many advertising forms – just not on UFC programming. Once again, the NFL, NBA, and other sports leagues have the same rules.
Dana White has made very specific comments about how these deals (such as the video game residuals) will allow fighters to collect checks years after their fighting career is over. I don’t know all of the details – but it sounds like there is a definite long term strategy to actually help the fighters.
There is ONE objective that the UFC has here: make more money for themselves and the top 2%-3% of the talent (the guys the actually care about because they bring in PPV dollars)…
…and do it at the expense of the other 98% who rely on sponsorship dollars for, you know, fancy luxuries like food shelter.
Saying “Hey, it’s all fair! It’s their show so they can do what they want!” is a bulls#it way justifying a large corporation taking advantage of its employees. You know damn well that fighters rely on these smaller sponsorships to pay their bills, and the UFC knows it as well.
In the American business model you don’t even stab employees in the back anymore…you stab them in their face, smile while you do it, and tell them you’re within your rights because hey, “it’s just smart business.”
Makes me want to barf just a little bit.
If it’s true that the UFC doesn’t NEED the $100k per sponsor, and it’s “not about the money”, then maybe they’ll take all these so-called membership fees, and spread the millions in revenue out amongst the fighters who make $6,000 per appearance – you know, the ones who will lose 60-80% of their pay as a result of this policy?
I think it has more to do with the UFC wanting their shows to look a certain way. Having 10 sponsors plastered all over a fighter’s shorts gives a specific image to what the UFC is presenting.
Having a fighter with only 1 or 2 bigger named sponsors also gives a specific image.
The UFC is allowed to control that image. MLB controls their image. The NFL does. Every major sporting event does. What the UFC is doing is no different. This is not about screwing over the smaller fighters. Yes, they are getting the short end of the stick…. But this is more about getting the Condom Depot’s away from the Tapout’s.
“I think it has more to do with the UFC wanting their shows to look a certain way. ”
Fighter’s shorts are no longer to appear NASCAR-esque…that look is reserved fully for the octagon itself.
Sponsorship taxes are no differnt from any other major sport league (NASCAR, F1, NBA, MLB, etc).
F1 doesn’t do that. If they did, the top advertiser in the sport wouldn’t be around. The others do but also have long standing systems in place to ensure that the athletes recieve their lions share of the profits. The UFC, of course, has no system.
I personally don’t care, though. Sucks for the dudes in that position, but hey, too bad. UFC fans won’t give a crap if the dark matches suck.
Clearly, the UFC just wants to limit itself to Grade-A, blue-chip sponsors like Lumber Liquidators and Fertitta shell companies like Xyience.
“Fighter’s shorts are no longer to appear NASCAR-esque…that look is reserved fully for the octagon itself.”
Wrong.
Outside of NASCAR, no athletes are plastered with sponsors. Shoes are typically as far as it goes.
The octagon is no different then a baseball stadium. There are ads behind home plate. All over the outfield walls. And typically all around the stands too. With the octagon, they can’t advertise on the walls because people need to be able to see the fights, so the canvas makes the most sense. But it is still in line with how other pro sports put sponsors around.
On a related note, it looks like Jon Fitch learned his lesson from being fired and then being further punished by being put in a prelim fight in his first fight back. This is from a new USA Today interview (http://content.usatoday.com/communities/mma/post/2009/07/68493711/1?csp=34):
Q: I understand you’re going to be the star of an upcoming documentary. How did that film come about?
A: We’re hoping it’ll get debuted at the film festivals sometime this fall. We’re still seeking approval and consent from the UFC.
Q: Have they indicated there would be any problem with that?
A: I think they just need to see it. They want to just take a look at it, probably to make sure there’s nothing negative put in. But it’s a very positive film and I think they’ll love it.
Do the heads of other sports leagues brazenly blackmail the athletes in their sports, even those that have never even been in their league, by threatening to permanently ban them from their league if they dare to sign to appear in a competing video game? Is that also like other pro sports?
“Every major sporting event does. What the UFC is doing is no different. This is not about screwing over the smaller fighters.”
It may not be PRIMARILY about screwing the smaller fighters, but that’s what is definitely happening as a result.
If you build an oil field in the middle of a wilderness conservation area, your GOAL probably isn’t to kill off an endangered species, but you might feel it’s a fair trade-off for some $$$.
The little guy with no voice and no leverage gets fcuked, and the (already very) rich guys get richer.
I don’t see anything to stand up and cheer for here.
“Outside of NASCAR, no athletes are plastered with sponsors. Shoes are typically as far as it goes.”
REALLY?
Isn’t this the most popular sports figure on the planet…plastered with sponsors?
http://tinyurl.com/lxrabs
“Clearly, the UFC just wants to limit itself to Grade-A, blue-chip sponsors like Lumber Liquidators and Fertitta shell companies like Xyience.”
Budweiser, BSN, Harley Davidson, EA Sports, Major Movie Studios, Tapout, Burger King… Hardly low level sponsors.
As for the movie…. When is the last time you have seen an active professional sports player do a movie on his league that was even remotely negative? That would be stupid. Joe Torre did it, but he is also a coach and royalty in some circles. And even then, there was discussion on restricting coaches from doing this. Even a movie based on the “Money Ball” book went through the Major League offices for their approval.
I didn’t say that they have no blue-chip sponsors, I said that they also have some decidedly non-blue-chip sponsors of their own.
Soccer? You really had to go all the way over to soccer and to find an example? How much relevence does Soccer have in American Sports? Is it even in the top 10 most popular sports in America?
Let me restate my comment just to have my words match what my intent was….
Outside of NASCAR, no major AMERICAN SPORT has advertisements plastered all over the athletes. There might be shoes. There might be one sponsor on a caddy in golf. But overall, that is hot how things work in the major American sports. The athletes typically have minimal advertising on them…. Not 15 small local brands all over their shorts.
^ u mad?
45, how about Indy Car? They have ads all over the cars, the pits, the drivers’ overalls.
The Indy 500 is an American institution.
“Soccer? You really had to go all the way over to soccer and to find an example?”
Well, it is the most popular sport on the planet, so yeah, it took me about 2 seconds to come up with that example.
I got a direct mail card advertising UFC 100 in my postbox today from C*mcast. I’ve never gotten one for UFC before. There’s a full-court-press on this event from the PPV guys.
The UFC is not a league. It is a promotion. Comparing it to large sports leagues is ignorant. Just because it is MMA’s most successful promoter, doesn’t mean it’s the theoretical equal to the NFL. Not even close…not by a long shot…no way in hell, etc., etc., etc. The UFC is a company, and therefore, it can charge whatever it wants for anything it wants. But don’t pretend it’s a league.
You’re right, the UFC is not a major sports league. The UFC’s management likes to compare itself to major sports leagues, and portrays its long-term success as a matter of whether they’ll get to be even bigger than the major sports leagues.
However, unlike a major sports league, the UFC doesn’t have an anti-trust exemption to justify the “anti-competitive behavior” (as Sen. Orrin Hatch said today about the BCS) that it engages in.
A major sports league would also not be able to get away with the kind of blackmail that the UFC has recently been involved with, according to numerous media outlets including Sports Illustrated.
Whether it’s a major sports league or not, blackmail is blackmail.
The Dictionary.com/Random House definition of blackmail in its verb form (ie, to blackmail someone) is:
-to extort money from (a person) by the use of threats.
-to force or coerce into a particular action, statement, etc.: The strikers claimed they were blackmailed into signing the new contract.
Last time I checked there are several other MMA promotions out there paying alot of money for fighters aside from the UFC.
Simply put the UFC lives by a simply code our way or get the fuck out. Several fighters have chosen to leave and others haven’t signed because of supposed harsh contracts.
If you don’t like the rules they are playing under leave, the idea that the UFC should play nice and lose the power and dominance they hold over the sport. Because a bunch of sensitive fanboys and media types don’t like their tactics is retarded.
First off, using the word “retarded” as an adjective = classy.
Also, a whole world of possibilities exist somewhere in between “playing nice” and “blackmailing current UFC fighters, former UFC fighters, and fighters who have never even fought in the UFC.”
[i]”Alan Conceicao Says:
F1 doesn’t do that. If they did, the top advertiser in the sport wouldn’t be around. The others do but also have long standing systems in place to ensure that the athletes recieve their lions share of the profits. The UFC, of course, has no system.”[/i]
Yes, F1 Teams and their race tracks are doing what the UFC is exactly doing in terms of an ad tax. For example, Ferrari is heavily sponsored by Marlboro and employs a similar strategy with other potential sponsors who want to place their logo on a Ferrari F1 car in partnership with Phillip Morris (Owners of Marlboro). In reality, you can’t compare F1 to the UFC because F1 is the 2nd most watched sport in the world, behind FIFA Football. F1 is a premier global ad space for companies, they will continue to clock to the series because of the global appeal and TV ratings. On the other hand, the UFC is mere peanuts but still employing a similar strategy but on a smaller scale.
Of course F1 teams charge other sponsors (using the Ferrari example: Eithad Airlines). They’re providing the space for said advertisment on their car. Its not a tax that’s employed by Bernie Eccelstone or Max Mosley prior to putting the logos are on the car. They make their money from either sanctioning/entry fees (Mosley) or from TV/track revenue (Eccelstone).
Those people in “positions of power” do not have any say on the advertisers each individual team places on their car, nor do they collect any direct money from them. If they did, they would have told Ferrari to follow the lead of McLaren years ago instead of throwing barcodes on the car.
As for athletes in American sports not being covered in sponsors, like I said, revenue sharing in those sports far exceeds that of MMA right now. I still don’t think its going to make a big difference for awhile.
Alan, you’re correct about the F1 comments. I’m not even sure what analogy Lester is even trying to make because there simply are no similarities here.
On top of that, the anti-smoking ban was driven by the EU, not F1 or the FIA. It’s just that Philip Morris were the only ones stupid enough to pay more than $100 million a year for a meaningless barcode (and a red livery that Ferrari had even before the Marlboro sponsorship and would never abandon anyway).
Lester, I can only imagine that you think Ferrari is akin to the UFC in your analogy, but that is incorrect. This is the correct analogy:
UFC -> F1 / FIA
Fighters -> Scuderia Ferrari and their drivers, Raikkonen and Massa
Though, actually, to be more precise, the FIA is more like the NSAC.
My guess is that if the FIA or Bernie had control over sponsorships, there’s no way they’d allow tobacco sponsors in F1 right now. Politically, its an ugly thing to do. Then again, so is saying that Hitler was forced into committing the Holocaust, but that’s for another forum on another day.
The point is that the FIA is a sanctioning body. They control the regulations of Formula 1 in a fashion much like, as you point out, the NSAC controls and enforces MMA’s regulations in the state of Nevada. Same thing goes for FIFA. Neither takes cuts of individual or team sponsorships.
The Soccer picture and example is actually counter productive to your position. Do you think that the player (who was it? Beckam?) decided what logos he wanted to have on his uniform? Of course not. His team tells him who can and can not be on his attire when he is performing on their behalf.
Outside of the stadium, or when he is not representing the team, I am sure he can plaster himself with whatever sponsor logos he wants to (and so can UFC guys). But, while in team uniform and playing in a sanctioned event his sponsorships are limited to the companies approved by his team. Correct?
This is really sad. The UFC and its principals are opening themselves up for a Civil RICO suit. The Fertittas have some really close connections to some other mess going on in Arizona right now, too: http://digg.com/d1w9RI
We all know the Xyience saga started this attention on fighter and cage sponsors. I’m glad people continue to challenge this racketeering attitude being displayed by Dana and the UFC brass. A non-compete clause in a fighter’s contract is one thing, but this is starting to get ridiculous. Next thing you know they will be taking money out of each fighter’s purse for an “Octagon use fee.”
Fighters do the most dangerous work for the organization, and they seem to be paid the least amount possible for it. Otherwise, they wouldn’t need the sponsorships. This new idea is bunk. Unless some multi-million dollar purses are in the pipeline, this only hurts the guys who put it all on the line and risk everything so the guys who do nothing but brag and posture can get all the benefits.
The lowest paid athlete in any of the four major sports is at least making 6 figures.
The sponsorship money is built into the salary. The Union negotiated that.
That’s definitely not the same situation as the UFC is in.
If the UFC upped the base salary…10K/10K, then I would believe that’s a start.
Otherwise, they are just treating the low level, up and coming fighters like shit with this ridiculous Sponsor tax.
Dana was the one that said that he didn’t need big sponsors.
Now that he has a few big ones, he’s shitting on all of the other sponsors that helped pay his fighter’s salaries.
I want to reiterate-
In baseball, the minimum salary does not include licensing money at all–that is another, seperate check players receive based upon service time during the year. For minimum salary guys, the licensing check received often exceeds the the minimum salary amount–thus, they more than double the annual income.
In other words, it isn’t part of the minimum salary amount at all–it is a seperate revenue stream entirely.
Michrome’s reply to Ultimo Santa through his own board might be some of the most unintentionally funny stuff ever. Reminiscent of his ROH fantasy booking, even. Among the highlights:
-Comparing the UFC upping pay to, it would seem, GM and Chrysler’s unionization, asserting that it has had negative complications for others. Putting out a crappy product for 25 years doesn’t help, but, you know…
-That the UFC is interested primarily in making money! A tremendous rebuttal to the guy who says it is morally repugnant as to the methods which they try and achieve that goal.
-That the UFC killed Pride. Truly, he did an awesome job of that…by giving them millions of dollars for nothing and helping to essentially bankroll the first few DREAM cards.
-That Japan’s MMA scene “pitifully limps along”. Clearly, that 19.1 peak that they had…jesus, ANY DAY GUYS AND ITS ALL OVER AMIRITE.
lol, now that is a great post. I couldn’t have said it better myself.
Looks like alotta sponsors paid 100k.