More on the UFC Merchandising Agreement
July 11, 2008
Sherdog.com’s Jason Probst has an excellent article on the UFC’s merchandising agreement entitled “Putting a Price on Fame.” The articles includes some quotes on the subject from several notable quotes from practicing sports lawyers:
“The fighters should be wary of granting these rights in perpetuity,” said Peter Bonfante, a licensing attorney based in Beverly Hills who has represented several athletes, including major league baseball players. “At the very least, fighters should seek a term that continues only as long as they are promoted by the UFC.”
Peter Carfagna – General Counsel at IMG and Professor of ports law at Harvard School of Law:
“I’d counsel strongly against signing this agreement for any of the top guys,” said Carfagna. “Because of the lack of an opt-out right. With the potential for perpetual rights, you don’t want to sell those away. There may be some who’d be happy to take it, because it’s 10 or 20 percent of gross royalties. That’s better than zero percent of zero percent. It’s all about leverage. Also it’s in the eye of the beholder. It’s not good if you’re one of the top guys who can cut their own deals. And why sign for no audit rights? That’s the real killer for me.”
Not everyone was critical of the deal. Noted boxing attorney Judd Burstein told Sherdog.com:
“You have to look at the UFC as a unified business,” said Burstein, who has represented Oscar De La Hoya and Lennox Lewis, among others. “All of the fighters are employees of the UFC. It’s not unusual in the intellectual property area that, an employer gives you a career, and without them, you wouldn’t be able to sell shoes. You’re (also) dealing with something extraordinarily successful over a short time. As there is (promotional) competition, superstars could develop their own deals. I don’t think it’s too far over the edge. This is not boxing promotion.”
…
“If there’s a significantly enough fighters demanding more, the UFC will cough up the money,” Burstein said. “If they organized, they could shut the thing down with a strike. It’s America. If they give you a draconian contract, sign it if it’s the only deal.”
The article is well worth reading in its entirety.
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