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UFC Merchandising Agreement Is One Sided But Not Exclusive

I've obtained a copy of the UFC's merchandising agreement.  The controvery with Jon Fitch is over the videogame agreement, which is separate, but this agreement is a matter of a large amount of controversy as well, so it is worth looking at.  To be clear, I got this a couple of months ago, so it's possible something changed in the last month, but I don't think so:

ARTICLE I
GRANT OF MERCHANDISE RIGHTS / COLLECTIVE RIGHTS
1.1
Fighter hereby grants to ZUFFA during the Term (as defined below) the
unrestricted worldwide right to use, edit, disseminate, display, reproduce, print,
publish and make any other uses of the name, sobriquet, voice, persona, signature, likeness and/or biographical information (collectively, "Identity") of Fighter solely in connection with the development, manufacture, distribution, marketing and sale of Licensed Merchandise (as defined below) ("Merchandise Rights").

1.2
The Merchandise Rights shall be ZUFFA's sole property in perpetuity
throughout the world, which ZUFFA shall hold free and clear from any and all claims of Fighter or anyone claiming through Fighter.

1.3
For purposes of this Agreement, "Licensed Merchandise" shall include, without
limitation, all apparel, footwear, hats, photographs, souvenirs, toys, collectibles, trading cards, and any and all other similar type products, including the sleeves, jackets and packaging for such products, hereunder made by any method now known or hereafter to become known that is (a) approved by ZUFFA, (b) contains the trademarks, trade names, logos and other intellectual property owned or licensed by ZUFFA, including without limitation, the Licensed Marks and (c) not created, used or sold in connection with the promotion of any Bouts, Pre-Bout Events or Post-Bout Events (as such terms are defined and included within the Promotional Agreements).

While the videogame contract is exclusive and for life, this one is not.  It grants Zuffa the lifetime right to create and sell merchandise based on the fighter's likeness, and bars the fighter from any claim to that merchandise approved by Zuffa, but it does not prevent the fighter from having any of this kind of merchandise on his own.

It is obviously one sided and heavy handed, but it is not exclusive.  It basically means they can create Jon Fitch dolls 20 years after Fitch retires and he has no claim to the revenue from them and no legal claim to stop them from using his name.  Whether this would hold up in court is a whole different question, my thought is that it would not.

The video game contract is basically the same from what I understand, but adds the word exclusive.  It would prevent them from appearing in any video games besides UFC games.  Again, the legality is questionable.

Update:  It is also worth noting the compensation scheme.

Under the contract, for covered merchandise that only has their name on it, fighters get 10% of gross revenues and 20% of gross royalties.  If the merchandise has their name along with other fighters, they get the same percentages with the number then divided by the number of fighters on it.

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WOW. That is unreal..

how little the fighters gain from the time they sign to possibly making it to superstar status. It reads to me like the UFC gains everything from their merchandising over the lifetime of a fighter.

They really need a union or something. That is simply unreal to me.

by lbk on Nov 20, 2008 4:24 PM EST reply actions  

The business owners/investors took a risk and they deserve to reap a benefit.

by Richard Wade on Nov 20, 2008 4:36 PM EST up reply actions  

Right, NBA team owners take a risk too..what's your point. The UFC is pretty established at this point.

I guess I just see it as the fighters making the org what it is. If they all boycotted the next few events, they could pull some power together. Without the fighters, the UFC is nothing.

by lbk on Nov 20, 2008 4:40 PM EST up reply actions  

What risk? The Fertittas abused their position of power

to DRIVE SEG out of business then swooped in and got the same regulations they helped put in place to put SEG in the poorhouse removed. That borders on illegal. They are criminals not speculative investors

by skwirrl on Nov 20, 2008 6:15 PM EST up reply actions  

Correct me if I'm wrong but

This merchandise deal still pays the fighter; not a lot but it’s hardly signing away their likeness for free.

by cyph on Nov 20, 2008 4:42 PM EST reply actions  

Yes, they are paid, but this agreement has no auditing rights so there’s no way for the fighters to make sure the UFC is adhering to the promises pursuant to the agreement.

by Luke Thomas on Nov 20, 2008 4:48 PM EST up reply actions  

And also..

that ‘lifetime’ thing could be a problem.

by mythbuster on Nov 20, 2008 4:49 PM EST up reply actions  

Thanks for adding to the discussion.

by mythbuster on Nov 20, 2008 4:53 PM EST up reply actions  

That is the discussion

The UFC holds the cards, if you want a better deal shop around. If all you want to do is whine about how unfair it is, have at it.

by dualdiagnosis on Nov 20, 2008 5:25 PM EST up reply actions   1 recs

What is ’lifetime" really? A lifetime is worth 5-10 years max in the MMA business.

by cyph on Nov 20, 2008 4:56 PM EST up reply actions  

Not true. Say you become a huge star ala Michale Jordan..

there are huge implications beyong ones playing career only. I don’t think any lawyer worth his/her salt would encourage someone to sign something like Dana wants his guys to sign.

by lbk on Nov 20, 2008 5:07 PM EST up reply actions  

Lifetime (n):

The length of time between birth and death (in this reality, at least – metaphysicists, assemble!)
see: “in perpetuity”

Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better. -Samuel Beckett

by Scott C. Broussard on Nov 20, 2008 5:08 PM EST up reply actions  

Fitch said 5-10 year contract would be fine. Lifetime is forever, and honestly I’d have a big problem with that in any contract I signed too.

by mythbuster on Nov 20, 2008 5:16 PM EST up reply actions  

I tend to lean with Rome on this one that it probably wont be enforceable, but who wants to spend the money to go to court to find out.

by Day Man on Nov 20, 2008 6:04 PM EST up reply actions  

Randy Cooters contract probably wasn't enforable either

The Fertittas are above the law in Vegas due to their old world mafia ties. All they need is to send a few words up and the court case stays right in their home base.

by skwirrl on Nov 20, 2008 6:17 PM EST up reply actions  

I doubt they have to do anything, the contract surely has a choice of law provision with a forum selection clause. Hell it could even have something about arbitration to a neutral third party (Mike Goldberg) or something of the like.

by Day Man on Nov 20, 2008 6:23 PM EST up reply actions  

"Term"

Can you please provide the section with the definition?

by boxingstudent on Nov 20, 2008 5:00 PM EST reply actions  

What’s your source on this?
Do you have a hard copy of this document?
Are you presenting this document in full or just the sections you feel are relevant?

by George Lucas on Nov 20, 2008 5:06 PM EST reply actions  

I have a hard copy. The whole document is gigantic, I’m not posting it all here, and a lot of it is kind of irrelevent.

by Michael Rome on Nov 20, 2008 5:16 PM EST up reply actions  

can you post the definition of Term at least? it’s important to understanding the clause.

by boxingstudent on Nov 20, 2008 5:17 PM EST up reply actions  

ok, I will do that when I get home later tonight.

by Michael Rome on Nov 20, 2008 5:19 PM EST up reply actions  

great. thanks.

as a law student, i’m always very interested to see the documents that control fighter/promoter relationships.

by boxingstudent on Nov 20, 2008 5:20 PM EST up reply actions  

How long is the whole document, anyway? I hadn’t thought initially that a fighter’s contract would be that big, but once I saw that merchandise, advertising, etc was involved, it must be substantial.

Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better. -Samuel Beckett

by Scott C. Broussard on Nov 20, 2008 5:24 PM EST up reply actions  

"Sole" vs. "Exclusive"?

The quoted sections define “Merchandise rights” as all apparel, etc., then say that “merchandise rights” are the “sole” property of Zuffa forever.

How is that not “exclusive”? How does that allow the fighter to go ahead and work out a merchandising agreement with someone else, like Affliction, for example?

I must be missing something …

by Kierkegaard on Nov 20, 2008 5:08 PM EST reply actions  

Yes but it is subject to the next section, which limits it only to Zuffa products.

by Michael Rome on Nov 20, 2008 5:17 PM EST up reply actions  

Doesn't Limit it to Zuffa Products

Section 1.3 states, as Rome posted, as follows:

“For purposes of this Agreement, "Licensed Merchandise” shall include, without
limitation, all apparel, footwear, hats, photographs, souvenirs, toys, collectibles, trading cards, and any and all other similar type products, including the sleeves, jackets and packaging for such products, hereunder made by any method now known or hereafter to become known that is (a) approved by ZUFFA, (b) contains the trademarks, trade names, logos and other intellectual property owned or licensed by ZUFFA, including without limitation, the Licensed Marks and © not created, used or sold in connection with the promotion of any Bouts, Pre-Bout Events or Post-Bout Events (as such terms are defined and included within the Promotional Agreements)."

I have bolded the relevant portion—“other intellectual property owned or licensed by Zuffa.” Doesn’t Zuffa license “personality” and “likeness” rights of the fighters? Arent’ rights to the “Identity” of the fighter licensed in perpetuity (even after death) pursuant to this Agreement, and wouldn’t that be considered “other intellectual property”?

If not, ok—let’s clarify, simple enough, right? Exclude a fighter’s Identity and “personality rights” from Section 1.3(b), and include a sentence, that says:

“The license and rights provided for herein shall be granted solely on a non-exclusive basis.”

That should clear up any confusion—right?

by Rob Maysey on Nov 20, 2008 5:25 PM EST up reply actions  

Don't forget

the shape Octogon has been taken to court by ZUFFA as their intellectual property. Everything belongs to them in their minds.

by skwirrl on Nov 20, 2008 6:19 PM EST up reply actions  

Could it mean that the merchandising rights for the individual items of merchandise created/produced/distributed by Zuffa are the sole property of Zuffa?

Don't believe a word I say, I don't train BJJ. -- TangleBones

by jemaleddin on Nov 21, 2008 11:34 AM EST up reply actions  

This has turned from fury at Dana to head scratching at Jon real quick.

by Derek Suboticki on Nov 20, 2008 5:33 PM EST reply actions  

Not So

Fury at Dana still going on strong!

by MMASuPreMaCy on Nov 20, 2008 5:41 PM EST up reply actions  

Well, for those who never stop doing it, yes.

by Derek Suboticki on Nov 20, 2008 5:52 PM EST up reply actions  

For those who aren't corporate tools

or a UFC shill on a message board it never stops

by skwirrl on Nov 20, 2008 6:22 PM EST reply actions  

Dude

Shut up.

http://mma4real.net/

by Tha Realness on Nov 20, 2008 10:46 PM EST reply actions   1 recs

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