The recent kerfuffle due to the new “sponsorship tax” that the UFC has levied against companies looking to sponsor (read: advertise with) UFC fighters has brought me back to some pieces I did last summer on addressing the problems behind MMA’s compensation system.
It should come as no surprise that fighter pay is still an issue in the sport: the issue of pay or “compensation” is and probably forever will be a hot button topic.
Why? People, much like corporations, are inherently greedy and always want more.
It’s funny, too, because some of the very same individuals that are clamoring for better pay and benefits as employees are sometimes the principles being served by those “greed, money-grubbing” agent corporations that are trying to “shaft” their own employees in order to maximize shareholder wealth.
This is the way of the world.
The compensation issues within MMA seem to be just a small part of a much larger issue: the perceived fair and ethical treatment of the fighters in general. It’s a very large blanket issue that covers safety, contract transparency, property and likeness rights, non-fight work requirements, and compensation, amongst others.
Lately, the sponsorship tax and EA MMA ban have become lightning rods for the fair and ethical treatment issue.
The Sponsorship Tax
To most, the UFC has come across as greedy and monopolistic in its efforts to charge potential fighter sponsors a reported semi-annual $100,000 fee to advertise their brands on the apparel of UFC fighters. Furthermore, the organization appears vindictive in trying to ban the collective fighter community from signing with EA’s MMA video game.
However, from the UFC’s perspective, it feels its actions are completely justified.
The UFC is the platform by which sponsors are trying to reach a particular demographic. By levying a sponsorship tax, the UFC feels it is accomplishing two goals: a.) it’s bringing the cost and value of sponsorship back to its equilibrium level, and b.) it’s bringing back a bit of lost control over its brand image and appearance. The UFC also felt slighted by EA Sports in the past and is now looking to protect its interests and those of its loyal partner (THQ) by helping to keep all fighters under the same “UFC umbrella.”
The two sides are on opposite ends of the spectrum here, and in looking for a solution, we’re best to start in the middle (where else, right?).
Probably the best solution to meet both the interests of the fighters and the UFC in regards to sponsorship is for the UFC to become a sponsorship middleman in a sense (I know…there’s a part of the MMA community cringing right now, but read on).
While fighters should be free to seek externally negotiated endorsements, the UFC and the fighters could be best served through implementing a program whereby the UFC acts as an intermediary to seek out and assign sponsorships to those fighters in need. In turn, the UFC could take a percentage not only for its service, but also as a platform fee.
The benefits of such a plan are numerous:
1.) The UFC would retain enough control and influence over what appears on its telecasts to properly shape its image as it sees fit. In the process it receives a platform fee and helps return the cost of marketing to what it feels is the equilibrium.
2.) The fighters benefit from the extensive network base of the UFC, and they’re likely to receive a greater sum of money in the long-run as a result of the UFC’s help.
3.) The percentage of each individual sponsorship – as opposed to the $100,000 fee – that goes to the UFC would also mean that the smaller players on the sponsorship scale aren’t totally eliminated from the equation. Further, the UFC could cap the gross amount of sponsorship tax at $100,000 so as to not penalize the big boys any further.
4.) In retaining those smaller sponsors, it’s also easier for the undercard and preliminary fighters to round out their pay. More options, more money essentially.
It seems like an even-keeled way to meet the interests of both the UFC and its fighters; quite reminiscent of a suggesting made last year around this time.
What about the EA ban?
The UFC’s animosity towards EA and the loyalty towards THQ is understandable – nobody likes a bandwagon jumper. After all, it’s reasonable to be loyal to those that helped you to get where you are. However, there’s a difference between loyalty and bridge-burning.
The UFC can no longer afford to give the finger to everyone that might have pissed them off a few years ago. If the sport is going to grow, the community as a whole – not just the UFC – is going to have to accept the fact that people are going to change their minds about MMA. And, really, isn’t that the point: to convince people that MMA is legitimate and that they should want to be involved with the sport?
Furthermore, the UFC cannot afford to limit their talent pool by imposing bans on future fighters – that’s why it’s an empty threat. The UFC has shown great precedence for going back on its word in regards to fighters they’d “NEVER” sign, but let’s be honest: there’s no such thing as NEVER in this business. If the UFC wants to have the best of the best, they’ll go out and get them “eventually” and that includes anyone that signs with EA.
Besides, competition is a good thing. A competing title is going to eliminate developmental complacency and spur innovation. You’ve also got to figure that enough intellectual piggy-backing will occur that the MMA community ends up with excellent video game representations of the sport – something which has proven to be a valuable marketing and awareness tool for other sports.
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