For the UFC, How Costly Is the Image of Sponsorship?
by Luke Thomas on Jul 8, 2009 6:11 PM EDT
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Personally, I'm for virtually anything that drives out the carnie, low rent element of MMA. If one takes the notion of becoming part of the larger sporting community and conversation seriously, jettisoning positively sub-proletariat hobbyists from the mix is a must. Certainly not every business affected by the UFC's alleged decision to charge potential sponsors $100,000 for the right to advertise on its fighters belongs to this demographic, but let's be serious: the overlap is obvious.
I've yet to be blown over by the idea that except for the short run, this move by the UFC truly damages the fighters' ability to earn income. But is it pragmatic for the UFC's bottom line and is it prudent decision making? Jake Rossen asks an excellent question:
Less disturbing, but possibly more short-sighted, is the allegation that the UFC will now "tax" sponsors a blanket $100,000 fee for six months’ privilege of endorsing fighters. As brass would likely argue, it’s the event -- not the athlete -- that creates the exposure that makes sponsorships worthwhile. Since that audience is owed to the UFC’s infrastructure, a tithing is apparently mandatory.
For brands paying out hundreds of thousands to top-level athletes, this makes some sense. But if that blanket $100,000 fee applies to undercard laborers, the UFC is cutting off its own feet. Mid-tier fighters that struggle to make $15,000 or $20,000 a fight see this as a soluble career because sponsor money makes training, living and eating realistic. The UFC has built an arena that allows advertisers to subsidize income, which effectively lowers their bottom line: They actually have third parties paying their employees and offsetting costs. Isn’t that enough?
A better question for the UFC: Is it ever enough?
Hardball. That's all the UFC knows. I'm largely sympathetic to their decision here to institute the fee, but the UFC won't be in this advantageous a position permanently. For their sake, I hope they've got some reliable friends and partners lined up. They're going to need them when circumstances change. And they will.
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Personally, I’m for virtually anything that drives out the carnie, low rent element of MMA.
Me too. This is but a part of that.
I like how the UFC is ‘taxing’ businesses for advertising. Back in my day, we called it ‘charging’ people for advertising. But hey, ‘taxing’ makes it sound worse – like it’s some kind of extra expense that’s added from above instead of a natural outgrowth of the increasing value of UFC advertising.
The only thing that really makes me smile about this whole thing is how powerless the people pissed off about it are to do anything about it. It’s like they’re afraid that there will be no horror stories of UFC fighters eating dog food because Bob’s Barbeque couldn’t get a patch on his shorts, so they have to crank up the outrage now before anything bad actually happens to anyone, because if nothing bad actually happens to anyone, then people won’t understand that the UFC is evil. See?
It’s just kind of fun to watch people freak out about the short term growing pains that accompany long term success and growth. If the UFC ever – and I mean ever – is anything other than the premiere MMA organization on this planet, y’all can say ‘nah nah, told you so Subo’. But guess what? It will never. Ever. Happen.
by Derek Suboticki on Jul 8, 2009 6:29 PM EDT reply actions 1 recs
I agree. I think there’s more to it though.
By pocketing some of the sponsorship cash, they can justify paying the fighters more money. In fact, they’ll have to if they want to be able to draw talent – they still need to compete with the payroll of other promotions. To the fighter, it’ll give the appearance that the UFC is paying them more though. Moreover, it fosters more loyalty to the UFC, instead of these random sponsors that they might be able to take from promotion to promotion.
In the end, it’s the UFC’s business. They control the product from start to finish. They can set whatever rules they want. If it doesn’t make economic sense for the fighter to fight under the UFC banner, they can, and will go elsewhere. It’ll be in the UFC’s best interests to make sure that doesn’t happen.
Steps to Justifying:
1) Say people with criticism are just haters and want to see them fail.
2) Say the are the #1 promotion for a reason.
3) They are doing this for the good of MMA and we will all be better in the long run.
Its true.
It works when all three points are true – nobody can even claim to be fighting injustice here since no injustice has yet been done.
by Derek Suboticki on Jul 9, 2009 3:31 AM EDT up reply actions
What does NASCAR do?
Do they tax sponsors that support race teams?
I always look to NASCAR because it’s very much like MMA in that most fighters (especially at the mid to lower level in the UFC) count on sponsorship dollars for the majority of their income.
I believe they do.
Even if they don’t, there are retsrtictions and crazy rules.
When Sprint took over as title sponsor there was a car sponsored by Cingular. They wanted Cingular out, but there was resistance, so they said sponsors that were already in could be grandfathered in, but when AT&T bought them and decided they were going to kill the Cingular Brand, they wouldn’t let the guy race in an AT&T car, and he was forced to find a new title sponsor, pretty quickly. Losing a title sponsor for a NASCAR team overnight is much more damaging than any impact this will have on an individual fighter.
the carney low-rent element
is where the next crop of TJ Grants and Jeremy Horns come from. Guys have to have aplace to start and need those little sponsors to pay their bills while they’re doing it.
Follow me on Twitter @KidNate
Well, nobody’s talking about banning advertisers at KOTC or Ring of Fire or anywhere else. You can be sponsored by whoever at the local levels, but when you make it to the Show, you can’t. Woopdie fucking doo.
by Derek Suboticki on Jul 8, 2009 6:33 PM EDT up reply actions
except you're missing the point
that the majority of the fighters in the UFC are undercard guys getting paid $5000/5000 or so who desperately need those condomdepot.com sponsorships to make a go of it.
Follow me on Twitter @KidNate
I’ve said it once and I’ll say it again, I need to see one fighter lose money/have blank shorts to get up in arms about this. Nobody has lost a cent yet. Let’s see how it happens before we criticize what’s happening. Fair?
by Derek Suboticki on Jul 8, 2009 7:08 PM EDT up reply actions
People have lost already. To think otherwise is naive. If there are fewer sponsors, then there is less demand for advertising space on shorts, post win shirts, caps…..etc. Less demand reduces the amount of sponsorship offered. Also, companies have advertising budget. $100,000 going to the UFC is $100,000 not going to fighters. We dont need to actually see blank shorts to understand fighters are losing out. Thats like saying you need to see a death in the octagon to realize the sport is dangerous. Very naive comments subo.
Um, but we do, because no fighter has gotten compensated less as a result of this policy yet.
by Derek Suboticki on Jul 9, 2009 3:32 AM EDT up reply actions
That you know of. How can you say that when there are over 100 fighters on the UFC’s roster. I am sure that it has already impacted someone’s pocketbook.
Nobody has come out and said that they’ve lost money as a result of this, and nobody’s fought since the policy was announced. Let’s see how UFC 100 looks without condomdepot.com before we flip out.
by Derek Suboticki on Jul 9, 2009 12:50 PM EDT up reply actions
Every time a sponsor has been banned, the fighters that were being sponsored by that organisation no longer receive money from that sponsor. Thats crystal clear. But you’re saying since nobody has come out and said “I have lost money”, you ignore the logical outcome of banning sponsors?
Im astounded you can sit there and claim to not know whether or not fighters have lost income.
Company A -———→ $4,000 -———→ Fighters A
COMPANY A IS BANNED!!!!! So now……..
Company A -———→ $0 -————> Fighter A
Fighter A has lost $4,000 in sponsorship money he had been receiving from Company A. Am I missing something?
Company B has paid the 100k broadcast fee and goes, “hmmm, let’s get the best bang for our buck and sponsor more fighters. Hey, how about we sponsor Fighter A for $5,000!”
There is also the view that some companies do not want to be associated with companies such as CondomDepot and thus limit their sponsorships to fighters not sponsored by those companies. Now that concern might not come up and they sponsor more fighters.
How about we wait and see the results before making blanket statements.
A man should never waste an opportunity to keep his mouth shut.
Company B has paid the 100k broadcast fee and goes, "hmmm, let’s get the best bang for our buck and sponsor more fighters. Hey, how about we sponsor Fighter A for $5,000!"
That is such an illogical suggestion.
Im not making blanket statements. I am stating facts. Some fighters no longer receive money from companies they used to be sponsored by. That is undisputable. If you wanna argue there are benefits to that……knock yaself out, but all my point has been is that so far, some fighters are receiving less money than they otherwise would have had the UFC not banned their sponsors. Pretty simple stuff.
I disagree.
If the UFC is looking to oust the “low rent” sponsors from their cards and will now be controlling what sponsors get inside the octagon they could in fact be helping some of their fighters get more money.
For example if One More Round can come up with the $100,000 tax wouldn’t it make sense for them to get as much exposure for their brand during each event. Putting their logo on multiple fighters at each event spreads out the “tax”.
If the up-n-coming and lower paid fighters are having a tough time finding sponsors because of these new rules the UFC should be able to offer these guys a pre-arranged sponsor package for the event.
There’s some upside to this.
“If the up-n-coming and lower paid fighters are having a tough time finding sponsors because of these new rules the UFC should be able to offer these guys a pre-arranged sponsor package for the event.”
In a perfect world, sure, the UFC could offer pre arranged sponsors. But do you really think the UFC is doing this for the benefit of the fighters? Are they trying to control sponsorship so fighters get a better deal? Nothing they have done in the past indicates that it is something they would do.
While the sponsor tax imposed by the UFC has been the source of much discussion and what if scenarios, the fighters themselves are seeing tangible effects on their bottom line. MMAPayout spoke with one fighter manger/agent who wished to remain nameless but who enumerated what the various UFC sponsor bans and fees have cost in real dollars. This fighter rep said the loss for his fighter was easily 6 figures.
http://mmapayout.com/2009/07/the-economic-impact-of-sponsor-tax-and-bans-more-ea-ban-info/
There you go. There is a direct tangible loss in fighter revenue, confirming what most level headed, sensible folk already knew. Do we have your blessing and will you join us in being critical now or will you go on the attack and question the credibility and of the anonymous manager and the validity of the comments?
by GeeDub on Jul 10, 2009 9:56 AM EDT up reply actions 1 recs
subo, are you kevin iole in disguise?
do you own stock in the UFC or something? i can smell the whiff comin off u from here….
and btw, people are “discussing” or as you would say, “freakin out about” this topic based on their real concern for what could happen to the fighters and how this will affect the ufc/mma in the long run. of course no one knows exactly the effect it will have, but we will know soon enough. it’s only natural for people to discuss how a new policy implementation will take effect.
and i’m sure a fighter who is affected by this probably won’t speak out about it if he’s still trying to make a go of it in the ufc, ala jon fitch. i doubt very much he’ll ever speak about how he really feels about his firing and rehiring until he’s out of the ufc. and i’m sure nate diaz won’t be calling the ny times or las vegas sun w/ his reasons for turning down ea sports video mma game due to dana’s “warning.”
by theflyingtsunami on Jul 9, 2009 3:01 AM EDT up reply actions
Everybody does better when everybody does better. Elite fighters will soon realize that the UFC’s success IS their success.
by Derek Suboticki on Jul 9, 2009 3:33 AM EDT up reply actions
Yes sometimes you have to lose some to gain some but not all fighters can “hang in there” and tough it out when the majority of their income has been taken away from them. I guess it’s the survival of the fittest. I don’t agree with it. It think the UFC can do better than $100,000 per sponsor for each fighter. That’s terrible. We’ll soon find out I guess.
I can see this being a good thing if they are planning to use it as a system to increase the base wages of all fighters.
But if the wages remain the same and the UFC is just banking a tariff against all the sponsors, then that is a pretty evil and somewhat self destructive thing to do to your foundation of low-mid level fighters.
I don’t get why people would assume that the fighter salaries wouldn’t go up as a result of this.
Fighter salaries have consistently gone up over the last few years. They can’t go up if Zuffa isn’t making money. Every way Zuffa comes up with to get more money is the potential for the fighters to make more money.
Everything in marketing and advertising is open to negotiation so I don’t buy the flat 100K fee. I suspect that groups paying big buck to be on the mat and get a name drop had a hard time swallowing condom depot getting such a prominent place on TV for pennys to there dollars.
by szucconi on Jul 8, 2009 6:31 PM EDT reply actions 1 recs
You nailed it....
….and that’s what most ppl can’t understand. Don’t forget, the UFC throwing this out there in the public doesn’t mean they have to enforce it for everyone. I’d assume they can pick and choose who they want to tax without anyone ever knowing.
Subo, you must really hate the fighters and want to see them screwed out of any extra income,or are you really Dana White in diguise?
Does this apply to every single small logos you see on a fighter banner when he first steps into the cage?
Will the website www.bjpenn.com have to pay 100k as well?
Have to say I agree with subo has been saying obviously people are gonna be pissed off with whatever the ufc does without seeing how things turn out first and how would these companies paying big bucks to get there names on the octagon or somewhere on the ppv to just have these fighters come out giving companies free sponorship. People always talk about getting the ufc into the mainstream of sports but then bitch everytime they do something about it. Top guys in the sport make money and the lower guys have to struggle just like in any other sport
It’s cute.
Hundreds of people on this site agree with Mask being inducted into the hall of fame, yet his brand would never have made it if this new sponsorship rule was in effect.
These are different times. The sport’s evolved, and so has the business. To compare today with the business environment when Tapout was first founded serves no purpose.
Well I’ll have to politely contend that the business hasn’t changed at all.
UFC puts out a product that sells on PPV and is expanding it’s reach globally. That is their business, and we all know business is good. Nothing in the MMA business warranted some neccessity to take that extra money from these fighters.
This is just another way to tighten their hold over incoming money, and I’ll agree that they’re well within their right to do so. But it doesn’t really make it right.
You say we all know business is good, but it wasn’t always this way. When Tapout started, the sport was still seen as a side show by the majority of the public. The UFC was bleeding money. They’re selling a million plus pay per views today. I’m not saying the business model has changed, although that has evolved too… it’s the entire business environment that’s changed. The scale of it all is entirely different. How much more money are they pulling in now? How much more money are sponsors paying out today than they were then? Different times call for different measures.
As I stated elsewhere, they control the product from the ground up. Sponsors are buying face time with the audience that the UFC is drawing. The UFC is providing the channel. They can take their rake of it if they want. People are describing this as if they’ll picking the money right out of the fighter’s pockets. If it doesn’t make economic sense for the fighters to fight for the UFC, guess what, they’ll leave. No one’s making them stay. It’s in the UFC’s best interests to make sure they retain their talent and the up and coming stars. Do people really think the plan is to slash the fighters paydays to drive fighters elsewhere? They’re going to continue to compensate fighters what the market requires of them. It’d be against their own interests to do otherwise.
What is stopping a new company from replicating Tapout's success?
Nothing that is happening here stops a company from replicating the success that Tapout has achieved. Correct me if I’m wrong but Tapout started promoting at small local shows and the more T-shirts they sold the more shows they went to and sold more T-shirts. Nothing is stopping another small company starting out like Tapout did from building it’s way up from nothing. A new T-shirt company can start out going to local shows and getting it’s name out there exactly the same way Tapout started. As the company grows with the fighters they are sponsoring at those local shows they will eventually be able to sponsor those fighters in the UFC just like Tapout did. The only thing that has changed is the UFC is no longer a small show.
ummmm
pretending that selling some tshirts at local shows would score you enough bank to pay $100,000 just to be ALLOWED to appear on a UFC show is just plain silly.
a local show is going to draw between 500-5000 people and that’s being generous, and not all those people are going home with your tshirt.
you’d need to be a successful multi-million dollar business to risk dropping 100k on a single marketing tool.
ummmmmmmm
I don’t understand this quote -
pretending that selling some tshirts at local shows would score you enough bank to pay $100,000 just to be ALLOWED to appear on a UFC show is just plain silly.
No one is pretending that selling some T-Shirts at local shows would score enough bank to pay $100k to appear on UFC shows now. No one has to pretend because it happens to be fact that it can be done. All you have to do is look at the history of Tapout and see how they did it and it can be done again the exact same way.
Tapout started out by going to small shows promoting their company and selling T-Shirts. This $100k fee doesn’t stop someone from starting a new T-Shirt company from scratch and following the same path Tapout did. Tapout slowing built there business over years going to small shows. Now it is a multi-million dollar business. Tapout has proved it can be done and this $100k fee from the UFC doesn’t change that. Tapout didn’t start out getting in millions of households every week by sponsoring big time fighters on nationally televised shows. They worked their way up to that and nothing is stopping a new company from doing the same thing now.
Tapout’s monumental growth has hinged directly on the UFC’s success. It sounds like you really think they would’ve made it without the UFC’s ballooning growth.
If I go to a local show today and some t-shirt company is sponsoring some no-name fighter am I really going to buy that gear? Probably not. Tapout did so well because they got their gear onto the fighters who mattered at a time when the UFC wasn’t imposing this ridiculous tax.
Assuming Dethrone/Silver Star aren’t able to buy their way back into the UFC, they’d probably die off if it weren’t for Strikeforce/Affliction. (does affliction have rules on other tshirt sponsors? ive never bothered to notice).
Your right I really do believe Tapout would have made it without the UFC. I believe they would have made it because the people running that company have passion for what they are doing and they believed in it. Now did the UFC’s growth help them out…. Absolutely it did but saying that Tapout was only successful because of the UFC’s growth is a slap in the face to all the people over at Tapout and is totally ignoring all the hard work they have put in to the sport as a whole outside of what they have done with the UFC.
my sentiments exactly
on a previous post re: the same issue, i said exactly what you said in response to guess who… subo and weoweo.
by theflyingtsunami on Jul 9, 2009 3:14 AM EDT up reply actions
So, if a fighter is bringing in more sponsors they should get more money, right?
Also, the general impression I get is that the fighters don’t say shit when the UFC does something that negatively impacts them…how can they. Yes, go somewhere else…but where…no where.
Vicious cycle controlled by the UFC. Will this same type of thing fly when MMA is a big mainstream sport. I think not. So why should it fly now?
I just thinks it’s a bit of a crock to be invited to the big show (UFC) and then not be able to make enough in one year for a decent living. The non-big leagues should pay sub par, but not the UFC.
Who says this won’t fly if MMA is a big mainstream sport? If MMA becomes a mainstream sport in north america, it will be on the entirety of the UFC’s back, and the UFC’s savvy.
There are plenty of different promotions fighters can go to, and they’re free to do so. The reason they want to come to the UFC is a combination of money, fame, and competition. They decide to fight in the UFC themselves, nobody’s forcing them to. The UFC can decide to pay the fighters whatever they want, just like other promotions can. They’re able to fill a roster complete with the vast majority of the sport’s top fighters with the current paydays though, why the hell would they want to pay more? What the hell kind business decision would that be to pay more just for the heck of it?
Apparently the current UFC leadership really sees only one way of doing things and that is by playing this kind of shortsighted 600-pound-gorilla hardball. If this is about getting rid of some undesirable sponsors, they could have just quietly instituted a system where sponsors have to be approved by the company. Instead they’re – indirectly – going after the income of the lower-tier fighters.
The Loretta Hunt incident, the strongarm tactics with the video game, now this… It keeps piling up. At the moment UFC may be the only game in town (and it looks like it will stay that way) but even if the fighters have no viable alternative, this may end up driving prospects away from the sport.
by Monday Morning Martial Artist on Jul 9, 2009 2:52 AM EDT reply actions
Apparently the current UFC leadership really sees only one way of doing things and that is by playing this kind of shortsighted 600-pound-gorilla hardball.
The UFC is lots of things shortsighted isn’t one of them, they’re the only ones who see the big picture and are going to be responsible for taking MMA to the next level. Any viable prospects that they drive away won’t matter because if your an MMA fighter you’re only dream should be to fight for the biggest and best mma org in the world and that’s the UFC.
My biggest complaint here is that the UFC should rather than collect the 100k enforce a rule that says the 100k charge goes to the fighter. that way :
1) the low rent sponsors are gone
2) the fighters get paid a lot more money, even if they lose
3) the UFC shows some goodwill to the fans and fighters by ensuring that the fighters are making more money through sponsors
Go Strikeforce
" Tell me something Steve, How does a guy from Puerto Rico loose a ball in the Sun? "
As I’ve said elsewhere, it’s a multi-step process:
1. Drive out the so-called “ghetto sponsors,” who have supported the fighters on their way up, and helped them ply their trade as they trained for their eventual UFC debuts, by denying them the symbiotic “we came up together” victory.
2. Introduce themselves as a party to the formerly bi-lateral negotiation between fighter representative and potential sponsor, as ponying up a fee to the UFC and being approved becomes a prerequisite to closing the deal. This is a precursor to potential sponsors coming to agreements with Zuffa FIRST, before finishing their deals with fighters.
3. Offer potential sponsors access to similarly-situated fighters, and more certainty with regard to placement on the card, as the specific fighter becomes less relevant, and thus, fighters become fungible.
4. Offer fighters the opportunity to “opt-in” to a service whereupon they are compensated for wearing “Official UFC Sponsors,” exclusively, rather than sponsors of their choosing. This provides the pool of fungible fighters.
5. Position themselves as more able to provide fighters income than their management, who are further marginized, and portrayed in contract negotiations as “parasites” looking to undermine the “loyalty” that UFC fighters should feel towards Zuffa. (Remember, if a fighter holds out, or is dropped from the UFC, his access to the “Official UFC Sponsors” gravy train is cut off.) Fighters drop managers, and rely upon the UFC to take care of them.
6. Endgame – Hungry young fighters, without representation, sign increasingly-restrictive contracts with UFC, and rely upon the goodwill and largesse of Zuffa management to earn their salaries, as they are short on leverage and business-savvy, but long on enthusiasm for proving that they “want to be a f’ing fighter.”
I've got it!
UFC should institute uniforms.
If they choose to sell space on someone ass, then the UFC gets that money, because they own the uniform.
If you want work for the UFC you have to agree to wear their uniform. It’s simple. If you want to sell your body for ads, you can’t do it when you’re at work (ie: doing anything for the company like press days or promos). You can only wear what you want when you set up your own stuff (like interviews or mag shoots) not when the UFC tells you to go somewhere and do something.
I don’t like this for fighters. But it really makes the most sense as far as business.
Except, of course, that fighters would be less able to stand out from one another, which would hinder their marketability. Also, would you also extend this requirement to tattoos and hairstyles, which could be used to promote for sponsors as well (why not get a giant temporary tatt advertising a brand that wants to pay you 100K?)
I’ve gotta be honest — I’m really disappointed that people here seem so dead set on justifying and facilitating this UFC encroachment upon fighter norms, based upon nothing more substantial than “it’s their company, it’s their prerogative.” Yes, we all get that, but that doesn’t mean that we should applaud the move or defend it. How about, “this is kinda messed up — just goes to show how little power these fighters have in relation to the UFC.” Succinct and to the point.
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