UFC 260 marked the end of an era, as it was the last event held under the Rebook uniform deal. Signed in late 2014 and starting in Q2 of 2015, the six-year deal was originally reported to be worth $70 million total over its lifespan.
The deal was one of many major policy changes the UFC had unilaterally enacted on their fighters over the last few years of the Fertitta era. Starting withe acquisition of their fighters’ image rights, then the introduction of a sponsor tax, and finally coinciding with the USADA program, the Reebok deal marked the end of fighters having their own sponsors in the cage.
In exchange for the sponsor money fighters were forfeiting, they would be paid a compliance fee for following a 19 page Outfitting Policy (later renamed Promotional Guidelines Compliance) that included apparel requirements and a code of conduct.
The original proposal called for payments based on a fighters’ current ranking, but this was abandoned as soon as it became apparent how hostile most the roster was to this proposition. It was replaced with a tiered system based on tenure, consisting of $2,500 for 1-5 appearances, $5,000 for 6-10, $10,000 for 11-15, $15,000 for 16-20 and $20,000 for 21 bouts and above. If a fighter is challenging for a UFC title, he or she will receive $30,000 while champions received $40,000.
Starting in 2018, this was increased for new fighters, so that for those with 1-3 bouts received $3,500 per appearance, those with 4-5 bouts received $4,000, and for those with more than 5 fights receiving the same as they had previously.
MMAJunkie has been tracking the payments over the years,
2015 total: $1,923,5002020
2016 total: $6,543,5002019
2017 total: $7,370,5002018
2018 total: $6,901,0002017
2019 total: $6,295,0002016
2020 total: $7,138,0002015
2021 total $3,185,000
Program-to-date total: $39,346,500
Fighter would also receive a 20% royalty payment of any merchandise bearing their likeness (some of the more prestigious fighters received 30%.)
For many fighter these payments were a drastic reduction from what they had been making previously from their own sponsors. Ryan Bader said he lost lost tens of thousands of dollars every time he fought, Brendan Schaub reported he was making six figures a fight before the Reebok deal, and Vitor Belfort’s wife claimed he lost millions.
That the deal was not popular with many of the fighters goes without saying. What is surprising is how unprepared Reebok was for this blowback. This is perhaps explained by an apparent meeting the UFC had arranged when the deal was first being negotiated, between Reebok and some of the fighters then employed by the promotion (Chuck Liddell, Matt Hughes, and Ronda Rousey’s names are most often mentioned). The selected fighters had apparently sworn to Reebok that the rest of the roster would look at them as “liberators.”
Reebok soon learned otherwise. Multiple fighters have told of how at events leading up to the roll out of the new kits, Reebok officials, who knew nothing about the finances of the deal but had instead come to give presentations about the new apparel options, found themselves being berated by fighters over lost income.
While many fighters lost more on the deal, the UFC was quick to point out that they were not profiting from it either. According to Dana White the fighters were “getting all the money from the Reebok deal. I mean, all the money goes to them...” minus some administrative fees.
Lorenzo Fertitta claimed that the UFC would have to cover some of the cost of the fighters’ payments for the first two or three years, a deficit that was expected to reach into the millions.
This is likely accurate, as documents that were created for the sale of the company to Endeavor included details on the agreement between Reebok and the UFC.
According to the documents the deal contained two components:
- An annual exposure fee that started a $4 million for the first year and increased every year until it reached $8 million in the final year.
- An annual Minimum Royalties Guarantee on products sold that started at $1.5 million for the first year and then increased every year until it reached $4 million for the final year.
As far as Royalties, the UFC was to get around 10% of all net sales and 15% of net sales of products with fighter IP. Fighters would then get their 20% royalty payment from this 15% — or 3% or the net sales.
The combined guaranteed exposure fee and minimum royalties guarantee was for each year:
2016 - $5.5 million
2017 - $8.5m million
2018 - $10.25 million
2019 - $11.25 million
2020 - $12 million
There was also the option to continue it through March 2023, but this option was obviously not exercised.
These guarantees totaled $47.5 million, and after deducting administrative costs and fighter payments it might not have been enough to cover UFC’s total expenses.
As for the originally reported $70 million amount, Front Office Sports has reported that the “agreement was worth upward of $80 million over the life of the partnership” and that “[r]oughly half the value of the Reebok deal came from merchandise to outfit fighters and members of their teams”
What’s missed when looking at just the Reebok deal though, is what happened to the rest of the UFC’s sponsorship. In 2015, the first year of Reebok deal, total sponsorship revenue was $52 million. Today it is thought to be $100 million or more.
The purpose of the deal was to not just make them look more professional, but more importantly to eliminate the competition of the fighters’ sponsors. Access to the Octagon and thus to airtime was something that could now only be negotiated through the UFC.
As the Reebok deal ends, their new partnership with Venum is set to begin, but the details on this new deal remain vague.