The Role of Agents in Modern MMA
by Luke Thomas on Nov 5, 2008 10:49 AM EST
in MMA News
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PrintLeverage is now a much trickier game:
Sports agents earn their value due to a unique ability to negotiate deals at the higher end of the market. The main tool used is leverage. Leverage is often formed when there is some sort of competition and an agent can pit one entity up against at least one other. Let’s use basketball as an example. An average NBA player in free agency can have his agent work potential deals with the Miami Heat and Orlando Magic. If both teams are interested in the player, the price may be driven up. Additionally, with going overseas as a viable option, an additional form of leverage may be used.
Now take that example and try to apply it to MMA. The IFL is gone and EliteXC quickly followed the path to doom. What’s left? With little competition, Zuffa, LLC has been able to dictate most of the terms to its UFC and WEC fighters. The end result could be something very similar to what is currently happening in the bowling world. There, the PBA is supreme. If you do not want to sign their standard boilerplate contract, then peace out. Now do you understand why Faber is concerned? He is making $40,000 per fight, but is smart enough to realize that such figures are not set in stone. With competition dwindling down, his salary may fall along with it.
Unfortunately, there is little that an agent can do in this space. Typically, an agent can negotiate endorsement/sponsorship deals for any athlete, but terms of “playing” contracts are usually only dealt with for those athletes who participate in team sports. You do not see Mark Steinberg of IMG negotiating Tiger Woods’ deal with the PGA. There really is no deal to broker. However, since MMA fighters are paid per fight, perhaps they could use an agent to negotiate those individual prizes with guys like Dana White. I see MMA as a large opportunity for agents in the future. Their role will be enhanced if some form of legitimate competition to the UFC and WEC arises.
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Some concern
however, there is a minimum level that not even Zuffa would want to go below.
A while back the UFC was very happy to make a big deal out of the fact that most of their fighters were able to be fighters full time, not a stock boy by day and MMA fighter on the side…etc….
Not suprisingly, the quality of their fights went up and continues to do so.
Therefore, I doubt that the UFC will want to see their fighters pay go low enough that they need to go back to being part time fighters. Other undesireable consequences would crop up too, if revenue continues to rise without a subsequent rise in fighter salaries.
Not to mention, if the pay scales get low enough, it will be very enticing for a big-budget competitor to start a new promotion. One of the big barriers to entry is the UFC paying its fighters from various revenue streams, but that goes out the window if the UFC starts significantly underpaying fighters.
by Michaelthebox on Nov 5, 2008 11:12 AM EST up reply actions
The issue is far less the floor than it is the ceiling for me. The UFC will pay, at the bottom, more than virtually any local show. The trick is how you get more money for your labor. And in that sense, it becomes not impossible, but a trickier game.
I think that the salaries will continue to go up.
I don’t think they’ll be paying Affliction type salaries any time soon, because no one can make enough money to afford that stuff. But I’m pretty sure they’ll keep the salaries going up to try to prevent someone new from jumping into the mix.
I realize that mid-level fighters will be losing some because they won’t have anyone to drive up their price, but I really don’t think the UFC is going to start lowering salaries and really raking people over the coals.
Yeah, of course. I’m not suggesting otherwise. I’m only suggesting that the leverage with which agents have to force up salaries is compromised somewhat and therefore a trickier game require someone who can negotiate the margins more cleanly. That’s tough to do.
Right now MMA agents should be focusing on creative ways to leverage the visibility and popularity of their fighters into promotional and enforcement deals. The overall audience is small compared to the other major sports but it is still a rabid audience.
I know it was more of a gimmick but the fake tattoos Baroni sported which was basically ad space on CBS was a genius idea.
$40,000 to Urijah is a joke. So disappointing to find out (the extent to which) Zuffa is exploiting Urijah. His marketability is not just good for the WEC but for the UFC and other MMA promotions, as well. The UFC is gaining a lot of fans (and PPV buyers) as a result of the success of the WEC fights on Versus and a lot of that has to do with Urijah’s popularity. I understand that not fighting on PPV limits the kind of pay he can get but let’s be serious—the bonuses at UFC90 were worth $65,000 a piece alone. How do you justify paying Junior Dos Santos whatever his salary was plus 65k in his first match with the UFC knowing that you have one of your superstars making probably about half as much. Regardless, It’s one thing for Dana & co. to under pay Urijah because he’s on Versus but lets give credit where credit is due: Urijah is partially responsible for the growth that the UFC has felt in the past year or so and he deserves to be rewarded for that.
More generally though I agree that gaining leverage is going to be really tough without someone stepping up to challenge the UFC. On the other hand I’m interested to see what Creative Artists Agency (CAA) is going to be able to do for GSP because they are on a different level than the other agencies in MMA.
I think calling for fighters to be paid more should take a back seat to calling on organizations to become profitable…
by mmalogic on Nov 5, 2008 7:48 PM EST up reply actions 1 recs
They are not in danger of losing him to another promotion (for a variety of reasons, not just the money aspect) and they know that. They know that until he fights on a UFC PPV they don’t have to pay him like BJ Penn, GSP, etc. Just based on that, they are exploiting him- they are getting one of the best P4P fighters at a bargain price and combine that with the fact that, like I said before, he is actually a money maker for the UFC and it’s clear that he is being underpaid. Put it this way, if he was at 155 (in the UFC) he would probably be making at least $150,000 more per fight than he is now. Granted I’m saying all this but there is probably something in Urijah’s contract thats limiting his pay but I’m no agent so I haven’t seen it.
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