UFC Inks Deal with Reebok: What Are the Pros and Cons of the New Uniform Deal?

Chad Dundas@@chaddundasMMA Lead WriterDecember 2, 2014

UFC Inks Deal with Reebok: What Are the Pros and Cons of the New Uniform Deal?

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    At last, the time is finally now.

    After months of speculation and at least one high-profile delay, the UFC and Reebok held a joint press conference on Tuesday to announce a partnership deal to outfit the fight company's roster of fighters inside the cage and at UFC events for the next six years.

    So as of this week, at least the organization's new hashtag isn't so ironic anymore.

    The deal means the end of independent sponsorship deals in the UFC as we know them. UFC co-owners Dana White and Lorenzo Fertitta appeared alongside Reebok president Matt O'Toole at the event, proclaiming a new day for both companies.

    The rest of the details are still a little bit foggy. As speculation continues to run rampant online, Bleacher Report lead writers Chad Dundas and Jonathan Snowden break down the pros and cons as they see them.

Pro: Fighters Might (Might!) Make More Money

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    Chad: One of the most unanticipated aspects of this largely anticipated announcement was UFC President Dana White’s insistence that all the guaranteed money Reebok is putting up will wind up in the pockets of fighters.

    “Every last [expletive] penny of it," White said on Tuesday, via Yahoo Sports’ Kevin Iole. "Who else does that? Any reporter who says this isn't a fantastic deal [for the fighters] is out of his [expletive] mind."

    If that’s true, I suppose the UFC boss is right. I mean, does it sound dubious that—at least at first—the UFC claims it will not profit from this landmark deal? Yes. Yes, it does. However, if we are to take White at his word, this might turn out to be a great thing for UFC fighters, especially those who’ve been struggling to turn a buck in a withering sponsorship marketplace.

    Details are typically scant, and we’ll have to wait a while (not to mention actually hear from some fighters themselves) before we pass any kind of judgment, but I think we can all agree that any arrangement resulting in the athletes being paid more is a positive one.

    Jonathan: If the UFC's deal with Reebok works the way most other major sports' merchandising deals work, it will be a mixed bag for fighters. For those who excel athletically but lack even a modicum of charisma, it will be a godsend, allowing them to profit like their friendlier and more marketable peers. But for the kind of fighters who move the needle, however, the fighters who are likely the impetus behind Reebok's interest in the first place? You can't help but think they will be subsidizing others on the card with part of what might have been their fair shares.

Con: Fighters Might (Might!) Make Less Money

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    Jonathan: The hidden secret underlying the UFC's groundbreaking deal with Reebok is their own role in creating the dire straits that made it necessary. There was a time, when the UFC was first emerging as a mainstream sport and appearing for the first time regularly on national television, when fighters did pretty well as a group with sponsorship money. The UFC's decision to tax potential sponsors helped bleed that revenue stream completely dry.

    For example, Americana MMA used to sponsor a handful of women's MMA stars. When those stars moved to UFC, those deals suddenly became untenable.

    "The fee they wanted was in the $50,000-a-year range," owner Peter Giannoulis told Bloody Elbow's Stephanie Daniels. "That's because I'm a small company; I'm sure the bigger boys like TapouT are paying a lot more than that."

    Considering that history, it may be naive to believe the UFC had fighters' interests at heart when signing this deal. The track record for that as a driving force for their business is just not there to support that interpretation.

    Chad: If fairness, we have to stress the might here, just as we did on the last slide. It's too early yet to tell how this deal will effect the roster from top to bottom. We can assume the folks at the top of the food chain will do OK. I'm wondering about midcard and prelim guys, fighters who really need the financial help. Say there's a guy who is able to piece together a decent living with ongoing sponsorships from four or five different companies. Is Reebok going to cover or exceed what he was making? And if it doesn't, what recourse does he have? Right now we have no idea.

Pro: It Looks “Big Time”

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    Jonathan: Let's be honest for a moment: Even if the old system of free-market sponsorship worked well for fighters before the UFC implemented its crippling sponsor taxes, it never looked anything less than tacky. And sometimes, tacky was putting it kindly. Remember the ubiquitous Condom Depot ad strategically placed on the rear of many fighters?

    With this Reebok deal, the UFC joins most of the major sports leagues in presenting a uniform appearance. It might not be as interesting as the old days, but it's also not likely to be embarrassing either.

    Chad: No, nobody is going to miss Dude Wipes. If it works out right, this deal could take down a number of birds with a single stone. It will make the UFC product look more streamlined and professional. It will give the UFC a bigger foothold with major mainstream retailers that will stock whatever Reebok sends them. It will give Reebok a fresher, younger, hipper vibe. If we’re lucky, it could even rid the industry of foil skulls and bejeweled baseball caps. Perhaps someday we will look back fondly on the days of Affliction and KTFO, but for sheer style points, I welcome our new apparel overlords.

Con: Everybody Will Look the Same

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    Jonathan: There's already a scary ubiquity when watching UFC fights. There are a handful of archetypal fighters, and within that archetype it's extremely difficult to distinguish between fighters of a similar look, build and ethos. Now imagine the same fighters without the ability to establish their own signature style?

    “This is no different than any other major sport,” UFC owner Lorenzo Fertitta told MMA Junkie's John Morgan. “You can’t just run onto the field or onto the basketball court with whatever sponsors you want. It just doesn’t work that way. We’re now at that level."

    I admit there's something to this. But MMA is not exactly the same model as those other sports. It's more akin to tennis or NASCAR, where the athletes are their own brands. Compelling stars in those sports make serious bank from endorsements—in many ways because they are allowed to stand out. This deal with Reebok assures no UFC fighter can ever reach that rarefied air.

    Chad: We all talked at length during 2014 about the many unforeseen ways the UFC’s ever-ballooning schedule has hampered the industry. One of those is that the sheer crush of fighters has made it hard to create stars. People already have a hard time following the week-in, week-out action. Now imagine how it will be once everybody looks exactly the same. No, I certainly don’t relish the idea of the whole UFC looking like one big episode of The Ultimate Fighter.

Pro: No One Will Go Without

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    Jonathan: On the main card at the most recent UFC Fight Night on Fox Sports 1, fighter Matt Wiman went to the cage without a single sponsor on his trunks. Once, that would have been unthinkable. Even middling fighters were often earning more from sponsorship than they were from their fight purses.

    In today's climate, thanks to the UFC's decision to tax all sponsors, it was becoming increasingly difficult for any but the most popular fighters to make a decent buck. The market had run dry, and fighters like Wiman weren't getting enough in exchange for a path or ad to make it worth their while. This way, at least, the UFC can make sure everyone has a little extra in the bank after the bout.

    Chad: This new brand partnership certainly appears to lessen some sources of stress and strain for fighters, which is obviously a good thing. Without having to worry about rustling up sponsors, it will (theoretically) be easier for many to focus solely on training and fighting. It will also likely be nice to know exactly how much sponsorship money will be coming your way before a fight and not have to collect on some fly-by-night start-up afterward.

Con: Pay Based on Rankings Simply Won't Work

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    Chad: Without a doubt, the weirdest fish in this kettle is the idea that part of fighter compensation will be based upon the UFC’s official Top 15 rankings in each weight class. You know, those rankings voted on by a mostly unrecognizable group of media members? The ones we previously thought were meaningless?

    Yeah, those. Seems like they suddenly just became very, very important.

    And very, very doomed.

    There are so many ways this could go wrong, I’m not sure it’s worth mentioning them all, but here’s a few examples: Remember when the UFC dropped poor Nate Diaz from its rankings while he was trying to renegotiate his contract? Remember when Jimi Manuwa got injured and couldn’t fight Shogun Rua last month, and then inexplicably moved up the rankings after Rua got KO'd by Ovince St. Preux? Remember the last time you looked at a media ballot and thought, “What’s this guy thinking?”

    Before, those were just funny anecdotes. Now they seem kind of sinister. I don’t see any way for a pay-by-rankings system to work, no matter how much the process gets tweaked in coming weeks. It was frankly a conflict of interest for media to vote before, and now it seems almost unconscionable to carry on with it.

    Jonathan: In theory the media rankings will decide how a fighter is paid. Whether that's ethical is for each outlet to decide—but at least it's ostensibly unbiased. At least on the surface. Sure, the media controls the rankings. But who decides which media make up the panel? It comes down to more UFC control. Considering its history of capricious and mean-spirited behavior toward its athletes, some of which was outlined by Chad above, that seems like a very bad idea.

Pro: Could This Finally Spur Collective Bargaining?

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    Chad: The jury is obviously still out on how any of this ends up affecting the landscape of the sport. However, I think one thing we can say without reservation is that the UFC was able to broker this deal on its own, without substantively consulting with any united group of its employees.

    We can say that because such a group does not exist. At present time, UFC fighters have no union, and there is no collective bargaining process in MMA. That means no matter how the Reebok sponsorship plays out, the fighters it affects likely didn’t get much of a say before things were signed.

    If it works out for the better? That’s great. If it doesn’t? Maybe this will finally be the thing to start the ball rolling toward the inevitable future: unionization.

    Jonathan: This plan has been in the works for a long time. Many were confused when the UFC first introduced the sponsor tax in 2009. By requiring companies to pay an exorbitant fee to the UFC before they were allowed to sponsor a fighter in the Octagon, they essentially crippled the market.

    While that might make this deal look a little more palatable to fighters who have been struggling for years, it's a pretty good example of how easy it is for them to make unilateral decisions that affect the entire workforce. An association, at the very least, would give fighters a voice in deciding their own future—and help make sure they are receiving a fair slice of the pie.

Con: This Consolidates (Even More) Power Within the UFC.

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    Chad: Because of its status as an odd hybrid—part public fight promoter, part private company—the UFC has always occupied a very weird space. It seems to want to run itself as a small family business, without publicly disclosing its financials and seemingly without need for trifles like written policies or rules and regulations. Yet, because of its status as the biggest, most powerful entity in MMA, it’s also frequently called upon to show a moral compass and act for the common good.

    Perhaps it goes without saying, but that’s an uneasy marriage. Through its first 14 years under the Zuffa banner, the UFC has consolidated a tremendous amount of power within our industry. Its fighter contracts are notoriously strict (ask Wanderlei Silva about that right now). Its payment structure for fighters is notoriously secretive. Its moods are notoriously tempestuous, and the backlash notoriously severe if you cross it.

    Clearly, cutting out the outside revenue stream of independent sponsors (and diminishing the power of fighter managers) yields even more power to the UFC itself. As the details of the Reebok detail remain murky at best, its hard to ignore the notion that this move gives the UFC even more sway over its fighters’ lives and paychecks and even more muscle to flex at the negotiating table.

    Jonathan: A cynic might believe that the UFC's decision to implement a sponsor tax was part of a long-term strategy to remove powerful MMA managers from the equation. Around the same time the UFC instituted its sponsor tax, it also limited access to many managers backstage at its shows.

    I'm not sure any of this is coincidence.

    Securing sponsorships was one of a manager's most important jobs. Eliminating that is a big step toward eliminating the strong manager from the sport. That has to be one of the many reasons the smiles are particularly bright at UFC headquarters this afternoon.