The International Business Times wrote a feature on the state of sports sponsorships in smaller leagues including the UFC. Overall, it provides a good overview of the current state of sports sponsorship using the UFC’s recent deal with Reebok as anecdotal information.
The article leads with Stitch Duran’s dismissal from the UFC and includes an explanation from the UFC’s Lawrence Epstein later in the story.
The article addresses the issue of sponsorship clashes between athletes’ personal sponsors and the official sponsors of the leagues and organizations in which they participate. The most recent example involves track and field athlete Nick Symmonds who was left off the US roster for this month’s 2015 World Championships in Beijing. Symmonds, a middle-distance specialist won a silver medal in the 800 meters at the 2013 World Championships and is a two-time Olympian. Yet, the U.S. Olympic team is a Nike sponsor (a reported $500M deal with USTAF) and Symmonds has an individual sponsorship with Brooks Running among others. As a result, he was left off the team to the consternation of Symmonds. He estimates that his income is 3 percent from the U.S. Track Team with 10 percent coming from prize money, 10 percent from personal appearances and the rest coming from corporate sponsorships. The New York Times detailed the sponsorship spat between the runner and the U.S. team as the chasm between the athlete and organization highlights the current push/pull of the business of sports. It indicated that an athlete like Symmonds could draw $250K-$350K a year which is still below the wages earned by NFL or NBA players. But, Symmonds’ earnings are probably more than a lot of UFC fighters.
Similar to the UFC-Reebok outfitter policy, the U.S. Olympic Track Team allows for its athletes to wear non-Nike gear but requires them to wear it during designated times (i.e., competitions, ceremonies and other official functions.) As we know, UFC contracted fighters are allowed to wear other sponsors but cannot wear them during fight week and/or other times where it is promoting a UFC event.
IBT notes that Nike and Adidas (and Reebok since it is owned by the 3 stripes) are spending more money than ever on sponsorships. Per research firm IEG, in North America, corporate sponsorship spending across all sports jumped 21 percent from $12.38 billion in 2011 to a projected $14.98 billion in 2015.
As IBT outlines in its article, “small leagues” like the UFC and U.S. Track and Field, there is a disparity not readily made up through earnings. The article notes that the NFL, NBA, MLB and NHL negotiate sponsorships and athletes obtain 50% of the revenue via the league’s collective bargaining agreements per sports management professor Dan Rascher. Of course, the four leagues have unions which represent the players of the league so that there is some facet of representation when leagues enter into these types of agreements. Any problems with the sponsor deals, the athlete can contact a union rep.
Lawrence Epstein was quoted in the IBT article. He stated that despite lower payouts versus past individual sponsor deals, “companywide deals provide fighters with stable sponsorship money” as well as facilitate long-term growth for the UFC. He indicated that 15 UFC fighters will have individual contracts with Reebok by year’s end which indicates that four more UFC fighters will have individual deals. Currently, 11 fighters have individual deals.
He also stated that Duran wasn’t fired because of his comments about the Reebok deal.
Via IBT:
“Unequivocally, his [Duran] comments had nothing to do with him getting let go. I can’t be more firm on that. There are a variety of reasons that he was let go but nothing to do with his comments on Reebok,” Epstein said. “He’s trying to paint this thing as, he said some stuff about Reebok and as a result, he was let go. It’s just not true. That’s not the reason why he was let go. I can’t be more clear on that.”
Payout Perspective:
The IBT article is an interesting look at the disparity of earnings between established team sports and smaller counterparts. What should be noted is that sponsorship spending is on the rise in sports which one might conclude that there are good opportunities for athletes to make extra revenue through sponsors. The UFC, like U.S. Track and Field, have brokered sponsorship deals which include substantial exclusivity that forecloses out opportunities for its athletes. The response by the UFC, as stated by Epstein, is that these deals provide stability for its fighters and will help the product in the long run. This is great if most of the contracted fighters are still with the UFC in the long run.
As for the continued repercussions of the Stitch Duran fallout, it is becoming a he said/he said sort of battle. Epstein contends Durant’s dismissal had nothing to do with his comments about Reebok yet he the timing of Durant’s departure is clearly not coincidence. Furthermore, White’s “shifting the conversation” about the Stitch departure lends one to think it had to be about Reebok.
“The response by the UFC, as stated by Epstein, is that these deals provide stability for its fighters and will help the product in the long run.”
It’s the opposite of that, Reebok got the UFC for cheap on a 6-year deal, most active fighters will be OUT of the UFC by then and will see next to nothing from that deal (If there were 100 fighters on that roster then it would be a different story, but for 600 active fighters it is completely reckless).
It’s important to understand that the primary reason for the UFC signing that deal had more to do with controlling the product & the fighters than the money itself. The less the fighters depend on managers the more the UFC controls them–What is there for a fighter to negotiate now? They are actually making less than before & giving up more rights than ever before, and now they’ll have to wait 6-years for the UFC to screw them all over again, maybe by then it will be a 2k increase in compensation & probably still on 10k/10k contracts. How anyone in their right mind could defend the UFC in this situation is beyond all reason.
I can understand the fighters argument with this issue, but no one is forcing them to work in the UFC. They could simply fight out their contracts and go elsewhere. It would be in their best interest to do so in the long run, especially if they want to form some kind of fighters union. But at the end of the day, for anyone to argue with the UFCs right to do as they wish with sponsorship simply makes no sense. No one is claiming this is a great deal for the fighters, but it may end up being a good deal for some fighters in the long run. In my opinion, the UFC is doing what they should be doing with respect to sponsorship and that is controlling it for their brand. This issue takes me back to the same discussions that were being had about fighters likeness and video games. We all know how that ended.
Here is the problem that people refuse to comprehend. Sponsors are on the rise but this is only big brands wh are paying more. Because the old UFC sponsor model of let pretty much everyone in. These big brands wanted nothing to do with the UFC. They were not going to share the cage with mom and pop t shirt companies selling out of the back of guys cars. Now that the UFC has limited that with a Reebok deal. It gives fighters steady sponsor while making them look more professional. It also opens up all the fighters to sign much larger deals and relationships with brands rather than getting a logo on their shorts for peanuts.
Now a brand will have to pick a fighter or a few fighters and make a large investment in them that is beneficial to both fighter and company. By putting them in promotional material, commercials, etc. This promotes the fighter and make them bigger. Putting a name on a pair of shorts doesn’t do anything for the fighter. It lets the sponsor reach fans. They get their way but they do nothing for the fighter. A national commercial does the same thing by connecting with the fighter to reach mma fans but it also takes the fighter to the general public. This is what all major athletes are getting. UFC fighters have been missing out because of the lack of a structure in sposorships. The UFC has now structured it and it will only grow as a whole and for individual fighters.
Fighters are now being brought in as spokemen for the brands rather than being cheap billboards with a logo. IF you make a name for yourself in the UFC. A brand will jump all over you and try to sign you to a huge deal and promote you all over the country. That’s much better than giving you peanuts and a patch to wear!
Question for Brain Smasher,Logical,mmagruru n everyone else–
-with word around the campfire that Reebok deal isn’t a good deal for everyone especially for less popular lower ranked fighters n guys who are on the end of their careers…Do you guys think any of the more popular or top 10 ranked guys will jump ship n go to Bellator for more money once their contracts expire?…Josh Thompson said in his Bellator signing announcement that he could see other fighters leaving the ufc for more money once their contracts expire…Scott Coker has always had a great reputation among fighters n I could see guys like the Diaz bros or Gilbert Melendez,leaving for more money or especially guys on the skids or end of their careers like Jake Ellenburger Hendo,or Roy Nelson Im sure Dana n ufc will fight to keep the bigger names n needle overs what do you guys think?…you think any top 5 guys will jump ship for more cash?…your thoughts please..Thank YouQ
The problem is the new sponsor model is going to really help the big name stars more than it will help others. We are already seeing it with major sponsor deals for fighters. Not to mention we don’t know what the 15 fighters with Reebok deals are making.
But fighters are not known for making the best decision so I thibk a few will make the jump but not top ranked guys. What will happen is BMMA will find a guy or two who have a name and ranked who they will concentrate their money on. But they can’t afford all of them. They can’t even come close to bidding against the ufc on a regular basis.
Look for a few more guys like Thompson. A tough out but end of his career and will never be champ. The UFC no longer wanted him. But most fighters realize how important being in the UFC. It increases their earnings and potential earnings across the board.
@Sergio
In my opinion, I don’t think you will see a mass exodus. For top tier fighters, think the top 10, there is too much upside by fighting in the UFC. This may not be the case for mid tier fighters or guys at the end of the careers. For these fighters, it will all come down to dollars. A fighters career is short, so these guys have to make the most of the time they are in the sport.