MMA Fighting reports that sport drink sponsor, GOOD4U, will no longer be an approved sponsor of the UFC. According to the beverage maker, it was informed Tuesday morning by Lorenzo Fertitta and the UFC that the brand will no longer be welcome in the UFC and WEC, beginning with this Saturday’s UFC 121 in Anaheim.
On its web site, GOOD4U posted a message addressing the UFC ban:
GOOD4U Drinks is seen by Zuffa as a direct competitor to Xenergy (which is owned by Zuffa) and AMP Energy which advertises heavily on both WEC events and Spike TV’s The Ultimate Fighter program and although GOOD4U are Sport Drinks NOT ENERGY DRINKS, they have been taking share from these brands.
The athletes affected by this decision at UFC 121 are Chris Camozzi, Patrick Cote, Matt Hamill and Jon Madsen. As this decision has just come down today it will be virtually impossible for them to find alternate sponsorship.
It has already been said many times that as much as any other sport, MMA fighters depend on sponsorship this isn’t a cliché tis (sic) is a fact.
For those of us that love the sport and want to see it grow, we should remember that there are companies out there that have the money and want to pay fighters. Shutting us out will only make it that much harder to support and develop new talent coming into the UFC.
Payout Perspective:
The timing of this decision could not be worse for the UFC Fighters affected by the ban. As we know from the Matt Mitrione/Malki Kawa sponsorship issue, mid-card fighters will have a hard time to find last minute sponsors as the agents for the fighters will be scrambling. Hamill was the only GOOD4U-sponsored fighter on the PPV card. Cote is fighting on the free Spike TV show and Camozzi and Madsen are not scheduled to be on television. Hamill may be the only one that may not have a problem since he is in a featured bout.
GOOD4U’s public relations response to its ban from the UFC was quick and easy to understand. The product was seen as a competitor to UFC interests (Xenergy and Amp Energy) and was taking market share away from its products. As a result, it banned GOOD4U. The message by GOOD4U clarified its position that it was not a competitor of Xenergy or Amp Energy and at the same time indicated that its business is growing. It tells people that it is a young, growing business willing to spend sponsorship dollars – a rarity nowadays.
It would be interesting to see the type of contract/agreement sponsors must go through to be a UFC approved sponsor. It seems as though the agreement allows the UFC to terminate its agreement at will. Will there be more vetting of sponsors? If so, this could mean future problems for fighters seeking extra money through sponsors.
I think we are letting the fact that Good4U mentioned Xenergy cloud this decision. The more important aspect is Amped. I think there is a good chance G4U would not have a problem if Xenergy was the only company listed. But the UFC put Sponsor restriction on fighters as a way to weed out mom and pop sponsors and lure in high dollar sponsors. The UFC cant let G4U ruin their relationship with Amped who is a much more important sponsor. If this was pressure from Amped then it makes sense and is very understandable. The UFC is trying to keep fighters and their managers from degrading themselves by not only begging small business for sponsors but having to wear them and get almost nothing out of them.
I dont think you can even compare Amped with G4U as far as benifit to fighters. Amped athletes are no doubt paid more and featured in nationwide campaigns in a variety of media.
Since this decision come from Lorenzo and not Dana. Im waiting for internet noobs to claim Lorenzo is now ruining the sport and claim he is a dick. lol
Haha…very well said Brain, especially that last sentence!! Overall very good info. IMHO i think its vital to the future for MMA, but we will see!
Brain, you make a few good points. However, I see a big problem with this type of arbitrary decision making with respect to sponsorship. Many fighters rely on revenue’s from sponsors and for the UFC to make such a decision last minute – than they should compensate these fighters in the short term until they are able to acquire a new sponsor. The fighters go into these sponsorship agreements with the fact that the sponsor is an approved UFC sponsor.
So what I propose is that the UFC need to be more vigilant up front with respect to approving sponsors. They should take accountability with that decision for at least a fixed time period as to allow fighters enough time to acquire new sponsors if the agreement is to be terminated.
I agree with Brain. Since their acquisition of Xyience, Zuffa has never seemed to really put any marketing muscle behind the brand. This is reflected in their distribution: at least in California, it is VERY hard to find Xyience drinks. It has improved ever so slightly recently, but you know when your devoted consumers (I really like Xenergy drinks) are shocked and giddy when they ACTUALLY come across your product in a store, it does not have sufficient availability. It’s funny because Xyience is a much more direct competitor to AMP than these GOOD4U drinks.
It’s not good for the fighters, but the reality is this is Zuffa and so we don’t know what is happening behind its financial “iron curtain.” Hamill may very well receive compensation for his lost sponsorship money, or he may not. Who knows? It is silly to pass judgement on actions by Zuffa in situations such as this, because 1.) we are in the dark, and 2.) it is THEIR business. They run it pretty competitively and are responsible to their partners such as AMP.
Jason,
From the consistency Zuffa has shown in its attitude towards “fringe sponsors” (those who are not “official” UFC/WEC sponsors), it seems that they can ban any brand they want from their events at any time. To be UFC approved you probably have to explain what your brand is, what your goals are in regards to the UFC sponsorship, and then they determine whether or not you brand seeks to compete with “official” sponsors such as AMP. Throughout the years, Zuffa has shown the rigidity of their contracts, which tend to allow Zuffa to terminate them at any time, while at the same time not allowing the other party the same recourse. In other words, Zuffa can bow out of any contract it no longer wishes to maintain, while their “partners” are stuck until the term expires (and even then Zuffa seems to always sneak in some sort of language concerning renewal). This is has been shown time and time again in fighter contracts with Zuffa (cut anyone for anything at anytime if desired) and lower level sponsors. Not sure about the more “official” sponsors, but my guess is that they have quite different contracts than the ones described above.
What people need to realize is that Dana White is somewhat of a hypocrite in the message he delivers to fans/media (let me explain, this isn’t blind Zuffa hatred). Dana White cares about mixed martial arts becoming a global phenomenon, but he very much envisions the sport existing with the UFC as the ONLY major organization in its landscape, and he works tirelessly to see that vision realized. All of the policies of Zuffa reflect that attitude. Furthermore, He has seen the way contract disputes can effect the business from both his direct experience, as well as what he has seen in major sports leagues such as the NBA and NFL, and the issues with the players unions. I believe that part of the reason UFC payscale is pretty low is because Dana wants to keep athletes “down to Earth,” keep their egos in check, etc. He makes it VERY clear that these athletes do not make themselves famous, it is the UFC brand that makes them famous. However, it’s not “take care of the brand and we will take care of you,” instead it’s “enhance the brand (by fighting exciting fights and winning) and the brand will enhance your star power, as long as you play by our rules.” High profile cuts are examples that Zuffa can and will cut fighters because, in the end, they don’t believe they need any PARTICULAR fighter (exceptions of course, such as Lesnar, GSP), since new talent will now instinctively flock towards the brand.
Zuffa plays hardball, plays for keeps and that’s just the way it is. No amount of fan outcry will change this. and if Zuffa can do anything about it, nothing will change it. The problem with viewing Zuffa as this “evil empire” is that without Dana and the Fertittas, MMA would not be where it is today, and may very well not exist. People say “oh, the sport would’ve inevitably emerged at some point,” but they don’t realize how much work it took to get it on TV and how many people were vehemently opposed to it. It’s hard to imagine another group with the right mix of capital, passion, vision, and work ethic to actually sink tens of millions of dollars into a sport that held no promise and no viable potential at the time.
However, there will be people who feel that the good will from Zuffa essentially saving the sport has run out due to the plethora of “unfair” business practices they’ve implemented. I am not one of those people, but respect their opinions. Zuffa is very much a bully of a company, but they have been by far the most successful MMA promotion to this point, so they must be doing something right.
>”Who knows? It is silly to pass judgement on actions by Zuffa in situations such as this, because 1.) we are in the dark, and 2.) it is THEIR business.”
As contractors the fighters are companies as well and Zuffa is screwing with those companies. Why should we respect Zuffa doing what ever they want in their business but then scorn the fighters when they try to make a living?
As for GOOD4U they won’t be able to do promotion with Strikeforce as they are tight with Rockstar. I am not sure about Bellator but with out a real TV deal Bellator isn’t such a great place to advertise any ways. So I guess they go spend their money on another sport where they are wanted. I’m not sure how that is good for MMA.
Michiel,
All your points may have some validity behind them but it has already been enforced that any sponsors needs to be approved by Zuffa and are required to pay a fee as such. The fee itself is substantial. So, unless this had been circumvented by the brand in question, I stand by my idea of fairness. We do not know whether fighters get compensated, but from what I’ve read the answer is no.
http://www.bloodyelbow.com/2010/10/21/1765445/brock-lesnar-and-the-star-system-can-the-ufc-adjust-to-new-realities
We’ll see…
Oh yeah notice the reference to MMAPayout.com’s Who is the Biggest UFC Pay Per View Draw series of articles in the above
article.
jv,
Your complaining about Zuffa not allowing GOOD4U to sponsor fighters during their shows anymore. Then in the next sentence you mention that GOOD4U won’t be able to sponsor any fighters in Strikeforce because Strikeforce only allows Rockstar on their shows.
Zuffa and Strikeforce are doing the same thing. They ban sponsors that compete with their major drink sponsor.
So do you feel the same way about Strikeforce doing it?
Very good insight here guys:
http://mmajunkie.com/news/21094/ufc-president-dana-white-baffled-by-backlash-from-good4u-sponsor-ban.mma
Check out the comment by Magnetic MMA:
“As the manager who initially brought Good4U into the UFC it is not as cut and dry as you imply. Our deal with the company for Carwin has little to do with fight time or appearing in x amount of UFC events. It is an endorsement based deal. There are not a lot of companies (non endemic) supporting fighters like Good4U. After working with Carwin they began to expand to other fighters in MMA.
All sponsors have to be approved by Zuffa. We submitted them for the Gonzaga fight and then the Mir fight and they were approved. They then had meetings with the UFC about specific ingredients in their product and can to an understanding of what they would need to do to not “compete” with either of Zuffa’s core sponsors. Good4u agreed to change the packaging and ingredients to meet Zuffa’s request. They went on to Sponsor Carwin again for 116, Todd Duffee, and several other fighters appearing in UFC events. I do not know the details of the other deals but I can tell you that Good4U was approved several times and made any adjustments asked of by Zuffa. So when they were not accepted for this fight it was a “new” development. ” …
***
Tons more there, I would suggest you guys check it out.
I can’t blame the UFC for telling GOOD4U that it cannot sponsor fighters inside the Octagon; they’ve got to protect the value of their sponsorship deals from what is essentially ambush marketing.
I’m interested to see how GOOD4U reacts to this. The good/smart brands will find other ways to partner/activate with fighters and generate awareness for their brand. Shane Carwin is pretty good at using his Twitter to promote his sponsors – if not slightly excessive – and I’m sure he’d be happy to do promo stuff outside of the Octagon. The UFC can’t prevent him from being featured in ads or promotional contests.
However, the challenge here is two-fold: 1.) GOOD4U probably doesn’t have a ton of money to buy ads or engage in other activation (fighter sponsorship was a very cost-effective mechanism for them) and 2.) it’s hard to do activation/promotion with under card fighters because no one really pays attention to them.
Then again, if the sponsorship of UFC fighters like Carwin is such a cost-effective exposure mechanism for GOOD4U, it sort of supports the idea that the UFC is leaving money on the table here.
Note that I said fighters like Carwin. His popularity has increased to the degree that he’s a main card guy. I still don’t believe there’s value in sponsoring fighters off the main card; the ROI is minimal and it’s very risky to assume the fighter will be shown on the PPV. In that light, maybe the UFC is doing GOOD4U a favor.
Great discussion here. A couple thoughts came to mind when reading these comments:
1) Why did the UFC decide to ban G4U this week? Did the UFC just receive the list of fighters’ sponsors and realize that G4U would be sponsoring fighters at 121?
2) Couldn’t the UFC have just banned G4U quietly during a week where there were no events?
3) According to the MMA Junkie article, Carwin’s tweet was subsequently erased from public viewing. I wonder if he was “asked” to remove it.
4) jv: Good point regarding G4U essentially being banned from MMA in general based on the analysis re Strikeforce and Bellator.
5) Can G4U parlay this attention into a marketing/PR campaign for its product? Similar to what occurred with the NBA ban of APL shoes (I realize the circumstances are different, but still).
The out of the blue ban is what leads me to believe this was a “request” from Amp. It seems people want to think the UFC is just banning things for the hell of it. This is in a way negative press even if on a very small level. The UFC would not have done this unless they had to. I do have a problem with the short notice for fighters to replace the4 sponsor. But if you set the cut off for sponsor approval further away the you give fighters less time to find sponsors from the date they know their fighting. So its a catch 22.
Like i said the UFC does this to increase sponsorships for everyone. Its a shame that some fighters now have to make the sacrifice but that’s life. If its not done then future fighters make the sacrifice, if it is current fighters take the hit, If the UFC compensates them then they take the hit. There is no perfect solution. I think the UFC could compensate here but they have already done so many times. They cant keep giving money away every time fighters get interest from banned companies.
This is one of those things you chalk up to business and stop bitching about it.
The UFC has initiated this most likely in response to a complaint from someone with Xenergy.
GOOD4U is being seen as an “MMA” drink and capturing this market in Canada where Xenergy is fairly well represented.
GOOD4U have done several events already with the UFC, and fight night logo placement is really only the icing on the cake in terms of overall marketing strategy.
There is no ill will towards the UFC, as they have been accessible throughout and overall are much easier to deal with than other Major Sporting Leagues
It is a business decision pure and simple and that’s life.
The issues are more centred on the fact that:
1) The ban came at such a late stage
2) The drinks were viewed as Energy Drinks when they clearly are not
Remember also that fighters sign contracts based on a current set of circumstances and if you alter those circumstances, you indirectly alter the value of the contract.
At the end of the day it’s a free market the UFC is free to ban whoever they don’t want at their show and GOOD4U is free to go elsewhere or find creative ways to deal with restrictions.
>”So do you feel the same way about Strikeforce doing it?”
Yes I do. The short timing is some what worse. But I just don’t see how keeping sponsors out of the sport and away from the fighters is good for the sport. If there were sponsors willing to pay more then the fighters would have been wearing their logo instead.
>”The UFC can’t prevent him from being featured in ads or promotional contests. ”
I haven’t read any fighter contracts in their entirety. But I have read a number of music recording contracts and in those the studio owns your image, signature, name, etc, etc. Meaning you can’t appear any where with out prior approval. That is for bands on their first contract. Make it through the first 6 and you can sign a contract where you don’t get bent. Many bands break up just to get away from that obligation.
Now if you remember back to the UFC game stuff where the UFC demanded the fighter sign over their image. Well if that is the case it probably means that Carwin has to get approval before he can appear in any thing even out of the cage. I can’t guarantee it but it is very likely.