The UFC's New Deal: A 360 Future?
January 5, 2009
Chatter is beginning to rise in the industry that the UFC is looking to move towards a strategy of signing some fighters to 360 deals in the future. For those unfamiliar with 360 deals, this is a concept that has seen it most widespread use in the record industry. The New York Times has discussed the increasing prevalence of 360 deals within that industry. The 360 concept would encompass the UFC getting a portion of all monies received by the fighter in his out of Octagon income in exchange for the UFC putting their promotional muscle behind the fighter. The UFC would play a large role in cultivating sponsor opportunities for fighters, etc. and would receive a large portion of said dollars under the scenario.
The mechanics of this are already being put in place it seems. Sources indicate to MMAPayout.com that Zuffa are directing their sponsors to specific fighters, though they have not asked for a cut yet. At the same time, sponsors are being okayed for some but denied to others, including recent sponsors like Cage Fighter and Full Tilt Poker (which you can read more about here.) Full Tilt was getting approved for fighters on the UFC 91 and Fight for the Troops card while similar deals with comparable sites were submitted and rejected for others, (though this policy was opened up for UFC 92.) One of the regular arguments for the UFC’s lower than boxing payscale is the ability to attract significant sponsor dollars, but these items are all at the UFC’s discretion and aren’t always adjudicated on an equitable basis, accepted for some but rejected for others.
Industry sources also indicate that the UFC has received stakes in both Tapout and MMA Authentics in exchange for sponsorships deals/ access to advertising in the Octagon. Such a strategy of having major holdings in primary sponsors of the UFC isn’t a new strategy. Zuffa has held/does hold significant stakes in UFC sponsor Xyience through the Zyen and Bevanda Magica subsidiaries. The UFC is quietly assembling a backlog of Zuffa-backed product to fill the pipeline to any possible fighters they sign to 360 deals. Such a scenario would be a vertical integration of the sponsorship field by the UFC, with the fight company being the conduit through which any flow of dollars would go.
If the UFC follows through with plans to move into more 360 contracts, they will have a chilling effect on fighter -agent/manager relations. As was evidenced by the UFC vs AKA imbroglio, placing the fighter at odds with his own management can reap rewards. There are plenty of Mike Swicks and Brandon Veras who will forgo team mates and management to stay in the good graces of the UFC. The UFC as it is currently is constituted places the fighter management in a weak position, but with the advent of 360 deals it would to seem to have them teetering towards near irrelevancy. While a direct management role by the UFC would seem be unable to pass the slightest of a regulatory challenge, the ushering into the MMA landscape of Carl King-ish type representation for fighters would seem to be a likely scenario.
All that said, it won’t necessarily be an unprofitable deal for the fighters. One MMA insider commented to MMAPayout.com that “I’m telling you it is just a UFC world and there is nothing on the horizon that is changing that. If they decide to market guys under a 360 deal the small amount the fighter gets in % is likely higher then anything they can get on their own.” That would tend to be true for a mid to low end fighter, but the high end fighters might take somewhat of a hit of this strategy gets traction.