UFC reveals Reebok pay structure to its fighters

May 6, 2015

The UFC has issued its pay structure for its Reebok sponsorship deal which goes into effect in July.  UFC fighter Cody Gibson tweeted a photo of what appears to be a letter with the pay structure listed.  The lowest tier for fighters with 1-5 fights is $2,500.

The next tier for fighters with 6-10 fights is $5,000, 11 to 15 fights get $10,000, 16 to 20 fights gets $15,000 and fighters with 21 fights or more in the UFC get $20,000.

Fighters with 1 to 5 bouts will receive $2,500 per fight; 6 to 10 bouts get $5,000; 11 to 15 bouts get $10,000; 16 to 20 bouts get $15,000; and 21 bouts and above get $20,000.  As it previously indicated, title fights would receive more.  Challengers will receive $30,000 and Champions will receive $40,0000.

How does this compare to what UFC fighters once made through sponsorships?  Take the case of Brendan Schaub who indicated that he made twice as much from sponsors than he did from the UFC.  If we are to assume this is true, he would have made over $60,000 from sponsors.  Based on this structure, he would receive $10,000 as he would fall into the 11 to 15 fight tier based on his 11 fights in the UFC.

Recently, the UFC announced a change to the payment structure as it moved from a pay structure based on media rankings to one based on the number of fights with Zuffa.  The new Reebok sponsorship deal has drawn criticism from fighters and managers.  It will go into effect in July with UFC 189.

Payout Perspective:

At this point, the UFC has yet to comment publicly (the letter received by Gibson was sent to all contracted fighters) on the payment structure and its rationale.  It’s clear that this is a hit for some (if not most) fighters that had deals with sponsors that it will now lose due to the Reebok deal.  Schaub indicated he was losing 6 sponsors.  Probably the same for many established fighters in the UFC.  We will see what the fallout will be in the coming days.

74 Responses to “UFC reveals Reebok pay structure to its fighters”

  1. BrainSmasher on May 8th, 2015 11:13 AM

    Joe no one can discuss this stuff with you if you are oblivious to reality. The UFC is a company not just a boxer. The UFC has 300+ office staff that keeps all these fighters in jobs. They have 500-600 fighters. They have to take the sport into areas that don’t sell to grow the sport. This loses money. What boxer does that? None!!! That’s why they never leave Vegas. The UFC fights legal battles to advance the sport and has. Made it legalized as we see today. They also now have fighter insurance and production cost for the UFC is much higher than boxing. You can’t conpare a corperation to a couple boxers getting together and splitting the money with no responsibilities.

    Keep in mind the UFC lost 40 million getting this going. Should they not be untitled to a return on their investment and risk? They also have millions in loans due to growing the sport. Those need payed also. This isn’t an every man for himself sport like boxing. Should the UFC not have the luxury of taking the sport to Australia? UK, Europe? Because of their model they can afford to take some loses here and there to grow the sport which benefits all fighters. Without risking the stability of the sport. Drastic increase in fighter pay makes non of that possible.

    Joe have you ever seen a boxing Title fight live? I have seen like 5 in 7 ufc events and I live on the east coast. Boxers never do that. It’s someone else’s job to do grass root events. They will never give up the money even with all they make to take an event anywhere but one or two major cities in the US.

  2. BrainSmasher on May 8th, 2015 11:16 AM

    bernie Madoff made billions. Maybe every CEO should make what he made? Just because someone makes something doesn’t make it right or anyone else obligated to get the same.

  3. joe on May 8th, 2015 11:41 AM

    Brain,

    I find it very hard to believe that the UFC has more than 300 employees. I don’t even think they have more than 100 employees. Cite that please.

    The 500+ fighters that they have are independent contractors and only get paid when they fight.

    The UFC is trying to grow their business (can’t fault them for that) not necessarily the sport. When they go to the East coast of Cali of Brazil or Asia it is because if they don’t some one else will. They want to own MMA. (again, can’t blame them)

    The boxing and MMA formats are very similar. That’s why we can compare them.

    Top Rank promotions has to go through the same logistics as the UFC to have an event in the MGM Grand.

    Paying the fighters more won’t mean that the UFC can’t make or profit or keep up with their obligations.

  4. joe on May 8th, 2015 1:31 PM

    brain,

    ***I live on the east coast. Boxers never do that. It’s someone else’s job to do grass root events. They will never give up the money even with all they make to take an event anywhere but one or two major cities in the US.***

    most of the upcoming televised boxing events are not in Vegas

    http://www.badlefthook.com/pages/boxing-television-schedule

  5. BrainSmasher on May 8th, 2015 5:55 PM

    Those are not PPV level events. Have you ever seen Tyson, Jones Jr. Lennox Lewis, Holifield, klitchko’s, Pacman, Mayweather, Oscar De La Hoya, etc at their peak?

  6. BrainSmasher on May 8th, 2015 6:17 PM

    Zeleznik UFC Chief Content Officer and former in charge of their London office.
    “I think it’s related to that. I was employee 36, I think, in 2006 when I joined. We are close to 300 employees now.”

  7. BrainSmasher on May 8th, 2015 6:21 PM

    I have heard Fertitas say they have 300 employees.

    Here is Scott Coker…

    ““I’m sure there’s some shock – everyone is in shock,” Coker says about the sale. “But (then) I went to the Zuffa offices and saw the amount of resources that they have and their 200 employees focusing on the growth of MMA and all eager to help Strikeforce basically take it to the next level. “

  8. BrainSmasher on May 8th, 2015 6:29 PM

    Also it doesn’t matter if they are contractors. They still have a standard of pay the UFC meets that far exceeds boxing. The ufc pays bottom guys very well which costs money. They also cover their insurance which costs money. Do you have any idea how much it costs the ufc alone to fly 24 fighters round trip to say Brazil and 50 or more of their cornermen for multiple nights in hotel as well as feeding them? They don’t hire local bum fighters like boxing does to fill a card. Every fight costs them many many times what the fighters purse shows. It is a much bigger opperation than you seem to understand. Even their credit rating mentions their extremely high production costs to produce an event.

  9. joe on May 8th, 2015 8:14 PM

    brain,

    thanks for the info. I see that you’re right about the number of employees the UFC has.

    But that doesn’t mean they don’t have enough profit to be able to pay the Fighters more.

    Those same credit ratings reports show that the UFC could double fighter pay and still take home a healthy profit.

  10. saldathief on May 8th, 2015 10:54 PM
  11. BrainSmasher on May 8th, 2015 11:02 PM

    Pay which fighters how much, joe? Even a slight increase across the board(which the UFC has already done many times and people still cry wanting more) would be a lot of money when you apply it to all pay levels equally for 1200 purses a year.

  12. joe on May 9th, 2015 8:05 AM

    Brain,

    credit ratings reports show that the UFC could double fighter pay and still take home a healthy profit.

    That would stop the loud murmurs about pay

  13. d on May 9th, 2015 10:25 AM

    Joe, you are wrong about Jones’ numbers.

    Up until his recent debacle, he was definitely making at least 3m per fight.

    Algieri may have made 1.5m, but the event may have lost money from that due to its poor ppv number. Also, either Pacquaio or Top Rank probably lost money from that event after the ppv numbers came in depending on how their contract is negotiated. That fight didn’t net 26.5m, no way.

    Also, same goes for Cotto-Martinez. That event lost money. So either Arum or Cotto lost money after the ppv buys came in and couldn’t cover the overhead. As did Marquez-Bradley, although they had a little more help with the Mexican tv contracts, but still a loss.

    Boxing’s business model is shit for promoters. If they don’t hit it big, they can lose money. Arum was predicting big numbers for Cotto-Martinez- expecting as high as 800k buys and it came nowhere near that, clearly proving they lost tons of money-Cotto as well because he co promoted the fight. Those numbers that you see upfront are purse numbers. That is gross revenue. These guys put their own money upfront for the fight that is conveniently ignored by every boxing fan.

    My point was that yes, the UFC HEADLINING fighters are somewhat underpaid and the contract terms aren’t fair. But even boxers often do not make what you see upfront in the purse, because they are footing the bill to some extent.

  14. joe on May 9th, 2015 3:02 PM

    D,

    The numbers aren’t exact because we don’t have access to everything but the point remains the same.

    The guys are underpaid. You could double the amount of money going to the fighters and still have a healthy profit.

    Where are you getting all of your Top Rank information from? I’d like to read it as well. Also, the bigger fighters try and co-promote because they get more money. Most fighters don’t do that and still get paid a good percentage of the revenue.

    But again, we agree on many things:

    1. The big MMA guys are underpaid based on value added and revenue generated
    2. The contracts are not very beneficial to the fighters
    3. This Reebok deal further limits the income potential of the fighters

    I’d add that the lower MMA guys are underpaid as well. If the UFC is the professional league it’s pretending to be, it should treat its athletes accordingly.

  15. d on May 9th, 2015 6:43 PM

    There was a breakdown of the revenue streams from the Marquez-Bradley fight I remember reading. The gate and the ppv were very low. The event for sure lost money as did the others I mentioned. The revenue wasn’t there. These fights cost money to produce. Tons of overhead. Keep in mind that ppv buy revenue typically is a 60-40 split with the cable/satellite companies getting 60 percent. So for a fight like Marquez-Bradley where the buy rate was allegedly 375k buys(that is sourced from Top Rank, so it could be considerably less), and the price was $60, generated a gross of 22.5m. But the promotion only gets 9m from that. The gate was roughly 3m. The tv contracts are the other bigger revenue stream and I can’t locate what they were specifically, but they were a few million, plus you have sponsorship that probably brought in around a million. So let’s say they brought in 17m from all of that. The fighters were paid 10.1m upfront. Now they are left with 6.9m. There are taxes they have to pay on the event. Let’s say that costs 2m, now they are down to 4.9m. Licensing, Insurance, NSAC costs, venue rental, probably cost them around another million. 3.9m. Undercard purses, another 700k, now we are at 3.2m. The cost for advertising, probably another 4m. -.8m. How about travel expenses/lodging, etc? The overhead adds up. HBO lost money for the event without question ad did Top Rank. The fighters didn’t get a penny from ppv and Marquez probably fronted money, he most likely lost some too after the ppv numbers came in.

    The fighters who do not co promote or invest as an associate make far less than the ones who do. I doubt t there is anyone in boxing in the US making over 2m on a consistent basis who doesn’t co promote their fights unless they fought Mayweather or Pacquaio. The headliners that don’t co promote(not the undercard fighters who make shit in boxing), make a higher split from the promoters than ufc fighters do, but they don’t make as much as the UFC stars do. But like I said, the ufc fighters are somewhat underpaid.

    The lower mma guys are not underpaid though. They don’t sell the fight. They could be replaced by anyone and they make much more than their boxing counterparts. Also, keep in mind, there are usually 12-14 fights on these ufc’s these days. Those low end guys wouldn’t have even been in the ufc 7 or 8 years ago because the cards didn’t carry that many fights. The pay scale is more fair in the UFC than boxing. You should check out what boxers make- even ones on major ppvs. They are literally paying to fight sometimes.

  16. joe on May 10th, 2015 7:10 AM

    d,

    the established boxing promotions like Top Rank, GBP, Main Event, etc put on plenty of shows a year. They win more than they lose and they all stay in business. Your example may be valid, but it doesn’t mean that the company is going to go broke because of one bad event. Besides, in the boxing business the athletes get 50%-60% of the revenue. That’s not at all the case in UFC.

    Additionally, if the UFC is going to be taken seriously as a League sport, then they should pay the athletes accordingly.

    The NFL, NBA, MLB, NHL, all have revenue splits of between 40%-50% between the leagues and the athletes.

    Hell, even the MLS, a relatively new and expanding league was paying 20% of revenues (it likely went up now that they signed a new CBA)

    The UFC only pays the athletes 10% of revenue. And again, I can’t stress it enough, the money is there. They can double the amount going to fighters and still turn a healthy profit. That’s according to the credit reports.

    Of course, they don’t have to, though. The athletes have to fight for their rights. But until they do, that’s something the public can point at and criticize.

  17. d on May 10th, 2015 5:38 PM

    I don’t believe I ever insinuated they will go broke. My point was that it isn’t a great business to get into because the profit for banner promotion is very minimal. Its actually worse for promoters with the big name boxers, because they make even less of the split- as high as 80%.

    Your numbers are very false. The UFC pays the fighters far more than 10%. You are going strictly by purses that are disclosed by the NSAC which is not the full pay. They are probably paying the fighters closer to 25-30% of the net. They should probably be making higher-closer to 40%, but let’s get the fact straight. The UFC has overhead for these events.

  18. joe on May 10th, 2015 8:44 PM

    d,

    If I went by only the disclosed salaries, not including POTN bonuses and backroom stuff, it’d be like 3% of revenue.

    According to Fertita the fighters are getting like $40-50mm a year

    http://espn.go.com/espn/otl/story/_/page/UFCpay/ufc-fighters-say-low-pay-most-painful-hit-all

    The UFC still had $110mm profit, that’s after paying for all their overhead costs.

    https://www.moodys.com/research/Moodys-assigns-Ba3-rating-to-Zuffas-Ba3-CFR-new-bank–PR_265693

    * According to Moody’s 12/2/2011 credit opinion, Zuffa had an EBITDA margin of 39% in 2010. That would mean the company had revenue of $419.1 million in 2010 *

    40 / 419 = 9% of revenues going to the fighters.

    Pretty much the league is trying to grow as much as possible on the backs on the fighters before they decide to get together and demand more pay.

    S&P even mentions it:

    ***Zuffa could face increased labor costs in the future if fighters organize (union) and seek a higher share of revenue, which is the case for most major sports in the U.S.***

  19. Matt Malloy on May 11th, 2015 8:35 AM

    Is this fair? It’s not hard to figure out:

    UFC has 44 events scheduled this year. Typical event seems to have between 10 to 12 fights scheduled. That’s 20 to 24 athletes. Reebok is paying the UFC $70 million a year.

    Do the math now. Let’s say the UFC takes a 10% cut off the top. That leaves $63 million for the athletes. $63m/44 events comes out to $1.43 million per event to pay out in sponsorships. Here’s the schedule again:

    “The lowest tier for fighters with 1-5 fights is $2,500.The next tier for fighters with 6-10 fights is $5,000, 11 to 15 fights get $10,000, 16 to 20 fights gets $15,000 and fighters with 21 fights or more in the UFC get $20,000.”

    Take UFC 187 for an example, to find the gross payout.

    Main Card – Five fights….average cost = $82.500
    Fighters 01-05: 1
    Fighters 06-10: 4
    Fighters 11-15: 3
    Fighters 16-20: 2

    Prelims – Seven fights….average cost = $60,000
    Fighters 00-00: 2
    Fighters 01-05: 7
    Fighters 06-10: 1
    Fighters 11-15: 4
    Fighters 16-20: 0

    Total UFC/Reebok Sponsorship payout is $142,500. This is for a main UFC PPV, which should typically feature more experienced fighters, thereby having a higher cost than say a Fight Night or smaller event. So let’s take the above and extrapolate this out for 44 events. Again, this should a number on the higher side of things, as we are assuming 44 ppv events, which isn’t reality. The total payout for the YEAR, would be $6.27 million.

    Reebok is paying the UFC $70 million for sponsorships. And the UFC looks to be handing out around $6.2 million of that a year to the fighters.

    Where’s the other $63.8 million going?

  20. Matt Malloy on May 11th, 2015 8:43 AM

    Correction.

    “UFC’s deal with Reebok is worth approximately $70 million across a seven-year period”

    New math

    —————————————————————————–
    $70,000,000/7 years = $7 million a year payout.

    Estimate ‘per event’ sponsorship, yearly total = $6.2 million.
    —————————————————————————–

    Based on this, the Reebok deal seems somewhat fair. It would appear that most of the money is actually planned on being paid out.

  21. joe on May 11th, 2015 2:17 PM

    d,

    If I went by only the disclosed salaries, not including POTN bonuses and backroom stuff, it’d be like 3% of revenue.

    According to Fertita the fighters are getting like $40-50mm a year

    http://espn.go.com/espn/otl/story/_/page/UFCpay/ufc-fighters-say-low-pay-most-painful-hit-all

    The UFC still had $110mm profit, that’s after paying for all their overhead costs.

    https://www.moodys.com/research/Moodys-assigns-Ba3-rating-to-Zuffas-Ba3-CFR-new-bank–PR_265693

    * According to Moody’s 12/2/2011 credit opinion, Zuffa had an EBITDA margin of 39% in 2010. That would mean the company had revenue of $419.1 million in 2010 *

    40 / 419 = 9% of revenues going to the fighters.

    Pretty much the league is trying to grow as much as possible on the backs on the fighters before they decide to get together and demand more pay.

    S&P even mentions it:

    ***Zuffa could face increased labor costs in the future if fighters organize (union) and seek a higher share of revenue, which is the case for most major sports in the U.S.***

    http://mmapayout.com/2011/11/zuffa-maintains-bb-credit-rating/

  22. Matt Malloy on May 12th, 2015 5:19 AM

    Joe.

    You are comparing financial figures from 2010, to what is going on today in 2015. That’s a bad example. The UFC’s income varies from year to year. Looking back to 2010, I’m pretty sure the UFC’s ppv revenues were much higher than what they are today. In fact, 2010 might have been the highwater mark for the UFC’s fortunes (at least in ppv streams)

    – Two Brock Lesnar PPVs
    – Chael Sonnen vs Anderson Silva PPV
    – Two Georges St Pierre PPVs
    – Chuck Liddell PPV
    – two Quinton Jackson PPVs

    So yeah, only 24 events that year. But 17 were PPV events, and those were higher than the 14 PPV events run in 2014. I can’t see how they wouldn’t be.

  23. Matt Malloy on May 12th, 2015 5:39 AM

    Actually, use MMAPayout’s own estimates from their Blue Book section.

    2010 – 16 PPV’s generated an estimated 8.98 million ppv buys.

    2014 – 13 PPV’s generated an estimated 3.30 million ppv buys.

    Putting that in revenue terms, let’s say the 2010 results (priced at $50 a buy) generated around $449 million dollars, of which the UFC’s cut was around $202 million. For 2014 results (priced at $55 a buy), the total revenues would be $181 million, of which the UFC’s cut would be around $81 million.

    Just on PPV income, the UFC made about $121 million less dollars in 2014, versus 2010. So that said, I would be a little bit careful about tossing up estimates of how much the UFC can (or cannot) afford to spend on it’s fighters this year in 2015, based on numbers from a few years ago.

  24. d on May 12th, 2015 8:56 AM

    “Joe”, I pointed out in the other article why your numbers are completely fictitious and you flat out made up comments that Fertitta made.

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