More on the UFC's EA MMA ban, Sponsor Tax

July 6, 2009

The situation with the UFC ban on NON -Zuffa fighters who sign on with the EA MMA game remains a bit murky but MMAPayout has been able to glean a bit more additional information on the genesis of the ban and reaction. Sources indicate to MMAPayout that UFC Talent Relations head Joe Silva was the contact man form Zuffa who got the word out to agents and managers about the ban. The word on the ban got out to the fighter management, but almost as quickly got back to EA MMA brass. Within a short time after the announcement, reportedly half a dozen fighter agents/managers had contacted the video game titan to inform them of the ban. MMAPAyout spoke with the Product Manger for the EA MMA game, but he offered no comment at this time. The EA embargo plan went sideways when word of the ban hit the UG, though, as Dana White is said to have gone through the roof when getting out the message went a little too well.

In news on another controversial move by the UFC , this week’s Wrestling Observer Newsletter gives a little more information on the sponsor tax that is being imposed on businesses seeking to sponsor fighters in the UFC:

The UFC is now charging prospective sponsors a $100,000 fee for the right to sponsor fighters that appear on UFC broadcasts for a six month period. This eliminates all the small-time sponsors because they may be able to pay $1,000 to a fighter but they aren’t paying $100,000 to UFC for the right to pay $1,000 to a fighter. The ones hurt the worst are the low-end guys who are struggling to make it on prelim money contracts. It also lessens the amount of money going to the fighters, because the $200,000 per year going to UFC as a licensing fee means perhaps $200,000, but certainly significantly less, going directly to the fighters.

UFC fighters in some cases earn more money through outside sponsorship than their UFC pay, although one manager estimated that for all but the top fighters, it would probably average about 40% of their income from a fight is coming from sponsors. But this is going to cut it back heavily, and with the exception of the top fighters, most in UFC are struggling, and even those who aren’t for the most part are going to have short-lived careers and many are going to have significant medical bills after their careers are over.

With $200,000 in fees for a year of sponsorship, sponsors in the cage will be either the higher end of sponsors, or likely ones that the UFC has points/business interests or personal relationships with (Tapout, Cage Fighter, Xyience, Skeletal Metal, etc.). With the UFC creating whitewash effect on fighters sponsorship opportunities, the new high end companies won’t be coming in via agent management relationships, as in the past , but via direct relation ship between the sponsor and the UFC. As Meltzer notes in the WON, the sponsorship market for fighters took a big hit last fall, and this upping of the ante by the UFC imposing this steep fee will only worsen the financial state of the fighters.

Got something to say?