Prior to Saturday night’s Strikeforce event, it was announced that fighters’ sponsors would have to pay a sponsorship “fee”. Similar to the UFC fee imposed on its fighters’ sponsors, Strikeforce sponsors would have to pay a fee effective immediately.
The Underground reported the fee and stated that unconfirmed reports had the fee at $35,000. The fee, not the amount, was confirmed on the forum by MMA manager Alex Davis.
Via Fighters Only:
Unofficial sources peg the new Strikeforce ‘sponsor tax’ at around $35,000 but there is no verification for this at present. When the UFC introdued the measure in 2009, company president Dana White admitted one company was being charged $100,000 but said there was a sliding scale in place to reflect the different economic capabilities of potential sponsors.
Middle Easy spoke to Strikeforce fighter Conor Heun about the sponsor issue:
The only problem right now is that I have had a couple of guys sponsoring me since I was on the small shows, now they can’t sponsor me when wanted to return the favor and give them the time in the bright lights they deserve. They invested in me when I want doing much and now that i am on the big stage I want to support them like they supported me when there wasn’t much return. I do understand what Zuffa is doing and I think it will be better for the fighters in the long run. I mean, I would be taking these small clothing company sponsorships and I would be getting $500 and the reason I would be doing that is because it’s the same $500 they would give me when I was on a local show. That’s all they can afford and I want to show loyalty, I’m a loyal person and loyalty is very important to me.
(H/t robnashville)
Payout Perspective:
The Strikeforce sponsor tax was inevitable since Zuffa purchased the UFC. Heun’s sentiments are probably mirrored by most Strikeforce fighters. While they appreciate the sponsors that have been with them since they started, the realities of the Zuffa business model will leave small sponsors out. For Zuffa, its about the UFC, and now Strikeforce brand. Zuffa is looking to attract the Bud Light, Edge Shaving Gel and Tapout companies and that likely means smaller startup companies will not be able to compete unless it can pay to play.
There is nothing wrong with imposing a fee for sponsoring a fighter, the only issue I would have with it is the timing. It would have been prudent for Zuffa (and Strikeforce) to notify sponsors of this fee. While news of the fee came out this week, it would be interesting to know whether sponsors knew this was coming. If not, that would not be fair for a smaller company to have to come up with presumably $35,000 to sponsor its fighter. If it was known earlier, at least notice was given. Of course, this probably depended on when Zuffa knew each fighters’ sponsor. The late notice is a burden on fighters that lose the sponsorship money and their agents that were likely scrambling trying to find replacement sponsors.
For more thoughts on the sponsorship fee, look here and here.
There seems to be some missing information here. Even the article that was linked to over at Fighters Only appears to be missing information. Information regarding more specifics of this ‘sponsor tax. For example in this article Dan Henderson talks about that ‘sponsor tax’: http://articles.latimes.com/2010/apr/16/sports/la-sp-mma-strikeforce-20100417
“Another UFC business stance that irked Henderson was the company’s interest in charging apparel sponsors, like Henderson’s own Clinch Gear, a fee, such as $10,000 for four months of unlimited appearances in the UFC octagon. “It’s like UFC is sticking their hands in our pockets,” Henderson said.”
Henderson says $10,000 was getting him four months of unlimited appearances in the UFC octagon. No where in this article or in the Fighters Only article is it made clear that this isn’t a one time pay for one show deal.
I don’t know maybe I’m wrong and that $35,000 ‘sponsor tax’ is for one Strikeforce show but I’m guessing it’s just like the UFC’s sponsor tax and it’s for multiple shows and allows them to sponsor multiple fighters on those cards.
Thanks for the comment Matt. I will look into it. I think that the $35K is for multiple shows…maybe the year. $10K seems like a steal.
There’s this tweet from our friend Robnashville via 5 oz of Pain. Nutrition and/or clothing sponsors had to pay $10K per fighter or $100K per year.
Another thing that I did not include in the article is the effect it will have for up and coming fighters that fight on Strikeforce Challengers cards. It will be interesting to see this Friday if a sponsor tax will apply to them.
We also don’t know if Zuffa is willing to work with potential sponsors on billing.. like allowing some sponsors to pay the tax in installments? It’s been known for awhile that Zuffa picks and chooses which sponsors it wants to work with, and the tax seems to be a mechanism of control in that regard. It will be interesting to see if we hear more about this issue in the future, or if it will fall by the wayside as it has in the past. I would imagine that they would be flexible if they deemed the sponsor a “good partner.”
It could very well also be part of the trend that Jason mentioned, and mean that Zuffa is seeking to freeze out smaller “mom-and-pop” sponsors in favor of opening up opportunities for more mainstream corporate ones. Kind of inevitable assuming the continued growth of Zuffa.