MMA Junkie reports on sponsor Dynamic Fastener’s interesting sponsorship strategy with the UFC. The small company does not pay the sponsor tax although its no-nonsense logo has been on many fighters of late.
The feature talks with Kevin Perz, the head of Dynamic Fastener. Perz is an MMA fan which is the reason why his company sponsors fighters. “We sell tools and fasteners to commercial construction, with an emphasis on people who work with sheet metal,” Perz told MMAJunkie.
Perz revealed that the company pays on average $1,500 per fighter for an event where he sponsors several fighters. He doesn’t target specific fighters, rather he targets mid-card fighters. But notably he paid a premium for his company to sponsor Miesha Tate for $6,500 and offered a $10,000 bonus if she had beaten Ronda Rousey at UFC 168. As a result of his strategy, agents call Perz looking to add his company as a sponsor for their clients.
An interesting note is that with the bulk sponsoring of fighters he has agreed on deals with managers for a “bundle price” on the sponsorship of a stable of fighters from the same manager.
Payout Perspective:
One of the takeaways from the article is that the sponsor tax is not applied to all sponsors. So, why have it? Certainly, the artificial barrier appears to hurt more than help fighters. Perz indicates in the article that the UFC should seek out more sponsors from smaller companies looking to get its name on a UFC broadcast. Perz is a fan of MMA which is the rationale for his commitment to sponsorship in MMA. His strategy of sponsor by volume has allowed his company name to get out there. Now the question is whether it equates to business.
The other point of interest is “bundle pricing” of his sponsorship with an agent’s stable. While this could be a good compromise between sponsor and agent, it may negate the best price for a specific fighter. Of course, a sponsor is better than no sponsor. Yet, one has to wonder if a bulk price for a group of fighters is in an individual fighter’s best interest.
Bundle pricing Dosent sound like fastest growing sport in the world lol…
If the UFC dosent apply sponsorship tax to all then they are just greedy taxing the blue chip companies at the same time depriving fighters big sponsorship
money
for what so that they can control them(fighters)?pathetic
Pacmans seconds/translator in the corner charges 10k dollars for a logo on his jacket ..guess what top rank does not get involve with it…
Are you sure you have their name correct? I’m pretty sure it should be Dynamic Fasteners not Fasters.
Haha. You are right BS. Corrected.
What does bundle prices have anything to do with how the sport is growing? It is no different than sponsoring a team rather than a player. Also global growth is a proven fact of the UFC. Their international growth is undeniable. Their explosion in Brazil is undeniable. Their success with 168 is undeniable. All reports show they improved PPV sales this year. They have reach milestones recently on FS1. MMA junkies said their set a new traffic record after UFC 168. Which likely means there are way more MMA fans or atleast many more hardcore fans than there was at any other time in the sport. Even what many claim was the peaks from UFC 100 on.
Yet you don’t have anything to show the sport is declining or not growing except your twisting of every minor detail. In fact I think your insecurity of the sport shows it is very strong. The stronger it get the more its detractors start to panic.
Annual UFC PPV buys are down a great deal from their peak. Down 30% from the 2010 peak year.
PPV buys for 2013 are basically even with 2012. Good news is the decline stopped this year.
By the measures of PPV buys and TV ratings, ie the most important measures, interest in UFC is significantly down from the peak a few years ago.
I think the sponsor tax is great. I think the reason it isn’t always used is because it isn’t always needed. You as why keep it if it isn’t always used. Look at it this way. Fasteners isn’t a market that is looking to sponsor fighters. Running that sponsor away when there is no other fastener company interested is not smart. Also they have very little to gain from a sponsorship. I bet the gain from employee moral of seeing their company on TV and satisfaction of helping the sport is more than any other return.
Ok, now the other side. Lets look at clothing or the many big companies like Soda, movies, training equipment, etc. The UFC knows what return these companies get. The UFC knows the value of getting their brand in the UFC. So why let these guys in cheap and low ball the fighters to do it all and allow them to do so because there being a stigma on MMA or it being new? They still reach a ton of people. Why not make them pay more? They pay more when they reach than many through other means. This tax makes them pay and makes them make a commitment to the sport and the fighters. Lets remember than many who have paid the sponsor tax has went on to sponsor MORE fighters. Lots of companies would not sponsor but a fighter or two. Now they sponsor many because they have paid the tax and want their monies worth. So now rather than every fighter having different sponsors. You see one company on a handful each event.
The other reason to charge a tax. If you do not. Then it is first come first serve to the lowest bidder. A company will go after the cheapest route to get in that cage. If Coke pays a mid level guy 10,000. Then Pepsi isn’t even going to be interested in sponsoring anyone. They certainly are not going to come in and pay another fighter 100,000 when Cokes fighter is getting the same eyes and could steal the show at a fraction of the price and upstage them.
For companies like that there is huge value in sponsorships and they are already paying other sports a boat load of money. Why let them come in and just use you? Also the UFC wants fortune 500 companies to sponsor the events. They want coke to sponsor the events and advertise during their shows. They will never do that if they can get their brand on fighters for 10,000. So the UFC puts in a tax for these type of companies to force them to pay more to get in the UFC.
When you see what some companies are paying other sports and athletes. They shouldn’t get away with low balling MMA fighters. The fact the UFC isn’t strict to the tax shows it isn’t just trying to screw fighters.
This tax has increased the perceived value and quality of the fighters. I remember when the sport first started getting mainstream attention. Writers would point out sponsors and make fun of the sport because of them. Having tacky local business, shady business, or low class business’ only makes the sports and the fighters look like unskilled amateurs. The Sponsor tax has weeded this out.
One last thing. You notice you don’t hear all the bad stories about sponsors in the UFC that used to go on. Back in the day many sponsors wouldn’t never pay up. You would hear all kinds of fighters trashing a company because they screwed them over and didn’t pay. With the UFC tax and way of handling sponsors. They have to be approved. They also often have to pay up in advanced. They also for the most part have to be committed and make a commitment to the sport. Those are less likely to looking to screw fighters or con people.
No system is perfect. But the benefit of bigger sponsors at the top will trickle down to other fighters. They is appearance of higher quality, The long term potential is better. If a few guys on the bottom lose a sponsor in the short term. It is well worth it. They need to take one for the team and have some vision for their future and others. To many people only willing to sell off their future for a few quick bucks that isn’t effecting their life anyway.
Go see what $1,500 will get you in NASCAR! It wont get you anything. They had to start somewhere and there was a time it was a local thing and they were lucky to get any sponsors. Now you have to have 50-100K to even talk to them. MMA will never get there if it doesn’t prevent fighters from taking low ball offers.
JKT,
You mean when the UFC switches networks 2 times and has spent all their attention on international expansion. Their numbers are not at their peak? No! Say it aint so! Of course they are down.
Look at it this way. Have you noticed how the UFC has had so many Brazilian fighters in the last year or two? You notice how all of a sudden they are winning more than ever before? Notice the PPV events held in Brazil? It is a proven fact non US PPVs don’t do well. So when you have 2 PPV’s that even by conservative standards lost 200k PPV buys each. That’s a pretty good cut of the annual PPV buys. That’s around 10%. Then when you factor in the huge increase in number of events. That itself will naturally lower PPV buys. Then on top of that. Factor in the UFC building and promoting fighters for the Brazil market. Then naturally people in the UFC are not going to be as interested in some of the fights, fighters, or events.
With all of that. The UFC still beat last year. That tells me they are growing even when they are not even trying. The UFC is clearly using this time to grow their international markets and grow their new divisions in mens and the Womans divisions.
In 2013 Brazilian fighter were in the main event or co-main event 46% of the fights. Compared to 33% in 2012. So what you get are events not geared to bring in US fans. Even still the numbers show the fans are still there as strong as ever. The hardcore base is there and with 168 PPV buy rates. The mainstream interest is as good as ever. So with the US fanbase holding steady or growing and international fan base expanding rapidly. That is what I call a growing sport.
I don’t think under the circiumstances. Anyone expected to see numbers on paper showing the UFC is blowing up in the US. The simple fact is they are not trying to appeal to US fans right now. I believe in 2014 or 2015. Once they blow the cobwebs off of FS1 and it is running full speed. And they have some history under their belts with WMMA and 135 mens division. We will see them start going after the US market again. With a new network. It is just a waste of time putting in the effort when the network just doesn’t yet have the reach. You effect is limited. So what better time than to focus on international growth and use this time to promote the new divisions?
Wow ufc fanboys working over time harder and harder 2 spin things….16 paragraphs hahahaha..
and you cant refute one line of it! Its pretty sad that your calling in life is to be this poor of a UFC hater. I guess to be a good hater you actually have to know the sport. That’s where you and your mental midget cronies come up short.
B.s. is emotional as usual hahaha