MMA Fighting had a piece on the state of sponsorships in MMA. It was a revealing look behind sponsoring of fighters in MMA.
Overall the piece depicts the sponsorship game as a huge investment for companies with a tenuous rate of return. For fighters, its a necessity to supplement their fight income as well as keep them financially afloat waiting for their next fight. For agents, its the likely primary goal in helping their clients.
Via MMA Fighting:
If you’re a company looking to sponsor a UFC fighter, the hit to your pocketbook varies depending on everything from the fame and popularity of the fighter you’re doing business with to the location of your logo. Walk-out T-shirts can be among the most expensive items, sometimes edging into the six-figure range, while a small decal on the thigh of his shorts might only run you a couple thousand dollars.
There is also the dreaded sponsorship “fee” or “tax” which the UFC has imposed on sponsors:
…most (sponsors and/or agents reached) put the cost of the tax at about $50,000 per year for the majority of apparel and supplement companies in the UFC, though the fee has been knonw to vary according to the sponsor and the situation…
Then, there is the issue of the return on investment. If a company pays to play, will viewers buy what your selling, let alone know who or what you are. Hayabusa’s Ken Clement told MMA Fighting:
“It’s trackable, but it’s very hard to be objective,” Hayabysa’s Clement said. “It’s the simple question of how many fans watching the UFC saw your logo and recognized it, and of those, who cares? …It can be looked at quantitatively, but there’s a lot of guesswork involved.”
Agent Dean Albrecht breaks down a company’s goals to sponsor a fighter in three categories: advertisement, sponsorship and endorsement. As defined by Albrecht, advertisement is the lowest tier of sponsorship as the relationship between fighter and sponsor is short-lived. The agreement is usually meant strictly for eyes to be on the sponsor’s logo. These are usually one-time sponsorship deals or done on a flat fee. Sponsorship is more of a commitment between the fighter and sponsor where the sponsor has the fighter wear its logo over a period of time. The idea is to become brand ambassadors for the company. Endorsements are an elite level of sponsorship as the relationship between fighter and sponsor is more exclusive. Its where the fighter will do more than just wear the sponsor’s patch or shirt during fight night. The fighter will exclusively wear the sponsor’s gear in and out of the cage. They will also make appearances for the sponsor.
Payout Perspective:
An interesting tidbit of the article was the fact that less sponsors are interested in Strikeforce and focus more on the UFC. The fact that Zuffa imposed its tax on Strikeforce seemingly is driving sponsors from the organization. We reported this summer on sponsor Ranger Up as it no longer found it economically feasible to sponsor its Strikeforce fighters. Could this have been a harbinger for the impending demise of the organization?
The article reflects on the work of the agent as they broker the deals with sponsors for their fighters. This is something that is very important for fighters as we all recall the lack of sponsors was the reason Matt Mitrione famously relieved Malki Kawa of his duties.
With the Fox deal, we shall see if the sponsorship industry heats up. While we may see the downturn of certain companies, we could see major mainstream sponsors dipping its toes in sponsorship of fighters, perhaps in the “advertisement” stage of sponsorship. Hopefully, for all involved there could be a time where we see bigger commitments from sponsors.
You might want to check out the UG thread on this topic, where a lot of industry guys claim this article as a bit ‘pie in the sky’ and question the reliance on Albrecht as a source.
http://www.mixedmartialarts.com/mma.cfm?go=forum_framed.posts_updsub&forum=1&thread=1874471&page=1&pc=45
“dreaded sponsorship “fee” or “tax” which the UFC has imposed on sponsors”
Not quite dreaded. A lot of the lower level fighters were getting stiffed by their sponsors before the UFC did this.
Sponsorship of fighters has no pertinent value. Its the same reason NASCAR is losing money on the sponsorship end. Logo soup is still logo soup.
Not to mention, most of the fighter sponsorships are frankly irrational spends made by unsophisticated “marketers”, done by shady “agents” who are just looking to make their 10%. Fighter sponsorships are crap and will always be crap until a sophisticated agency or team of agents can leverage their fighters and provide what real marketers want which is access to the talent, use of talent for promotional purposes, and ability to measure results (i.e. X amount of people showed up for a meet n greet, or X amount of people saw our youtube content video). Very few “sponsors” on a fighter do it correctly right now.
The glut of apparel sponsors is also a drain on the market value and ability for REAL advertisers to get involved. Seriously… whats the point for Stockton Ford to put their logo on a Diaz brother… on a global broadcast? Its ridiculous. However, because fighter management and representation is so fragmented you have idiots like Malki Kawa selling some douche at Iron Bridge tools on John Jones, because the CEO has an ego and likes to see his logo on somebodys rear. Iron Bridge doesnt even SELL TOOLS to people.
The only true way to leverage a sponsorship in MMA is to have a league wide association to use marks and more importantly… CONTENT. slapping your logo on something is stupid. It doesnt make people buy anything, you need to be able to activate your participation which apparently no one who is paying attention to the marketing of MMA understands. Even the UFC itself does a shitty job for their own sponsors. Fortune 500 companies are too sophisticated to want just a logo on a canvas and have two guys bleeding on top of it. It may work for moronic companies such as TapouT and Clinch who dont truly understand marketing, but look at what a Dodge has done…find ways to tie into social media, utilize content, and then put a logo out their last. Even then the UFC is screwing Dodge and not fully taking them to the next level with a program that could be executed so much more. The sponsorship across this sport is rudimentary and unintelligible at best.
I feel like they have people working in marketing who dont even understand the definition of the word.
I read the article by Ben Fowkes and I thought it was excellent.
Perhaps Ben did not emphasize enough the disparity in endorsement revenue between *stars* and unknown UFC fighters–but the article did shed some much needed light on the pay of fighters from ads and endoresments.
The new Fox deal will amp up the marketing muscle of the UFC–and will attract many more sponsors to the table. Sponsors are about demographics–and the UFC demographic is much sought after by advertisers.
I expect income for UFC fighters from advertising and endorsement revenue will spike in the next two years. But their still appears to be a paucity of hard numbers for actual payouts and endorsement payouts for UFC fighters. Despite all the speculation–there is little hard evidence about the pay of UFC fighters–and the UFC wants to keep it that way.
@CodeMaster
I think you are spot on. What will be interesting will be the new marketplace for sponsors in the UFC-Fox era. How will mainstream sponsors utilize sponsorships? Not sure if we can look to NASCAR as an example but we shall see.