UFC-Reebok Deal: Who Wins, Who Loses on UFC's New Uniform Policy?
Last week, UFC fighters and managers finally received firm numbers regarding the promotion's upcoming Reebok-helmed uniform deal. The response? Outrage.
For those who missed it, the breakdown is thus:
- Fighters with between one and five fights in the UFC, WEC or Zuffa era Strikeforce will receive $2,500 per fight.
- Fighters with six to 10 will receive $5,000.
- Fighters with 11 to 15 will receive $10,000.
- Fighters with 16 to 20 will receive $15,000.
- Fighters with 21 or more will receive $20,000.
- Champions will receive $40,000 per fight.
- Title challengers will receive $30,000.
It's a rare peek into the notoriously secretive world of MMA financials, and, man, it is not a flattering look. The dust has settled from the initial revelation, and now it is time to pick through the news and comments to try to figure out who is coming out on top in this blockbuster deal and who is really paying the bills.
So who are the winners and losers of the UFC's new uniform policy? Read on and find out.
Winner: The UFC
Let's be honest: The UFC isn't doing this out of the kindness of its heart. CEO Lorenzo Fertitta can say it's going to lose money in the short term—or that it will "deficit finance"—and that "the vast majority of the revenue" will go to the fighters, but the UFC didn't become a billion-dollar company through charity.
Throwing its hat in with Reebok puts the UFC in position to instantly take control of the MMA apparel market and expand its presence among major retailers.
Just think about the before-and-after of buying a fighter's walk-out shirt.
For a long while, if fans wanted to purchase an Anthony Pettis "signature tee," they would have to figure out who was sponsoring him (usually Headrush), track down their website, go through their shop and order it online.
With the Reebok deal, it can be as simple as going down to Dick's Sporting Goods and buying that blue "Showtime" shirt in person. It might not happen in July, when the Reebok deal goes into effect, or any point in 2015, but this is closer to becoming a reality now than ever before.
There are other fringe benefits, of course. The UFC will certainly look like a more professional sports organization with the Reebok logo scrawled across fighters' back ends instead of "Condom Depot" or "Dude Wipes."
More importantly, as Bleacher Report's own Jonathan Snowden spelled out—and UFC fighter Josh Samman later echoed through SB Nation's Bloody Elbow—the UFC has repeatedly taken steps against powerful managers in the past, and the Reebok deal continues that trend. The UFC has had several high-profile disputes with management firms (most notably its bitter 2008 skirmish with Zinkin Entertainment), and the Reebok deal takes a fair bit of power out of their hands.
Even if the UFC isn't making much off shirts and shoes, it now has far greater control over the livelihood of its fighters.
Loser: Many, Many Main Card-Level Fighters
When the details of the Reebok deal were released on Wednesday, it was pretty easy to tell which competitors were making money and which were losing money. Fighters in all stages of their careers flooded onto Twitter to air their grievances, but the most consistently dissatisfied were highly regarded newcomers and well-known middling veterans.
The first volley, of course, was tossed by Myles Jury, who made waves last week by throwing all of his Reebok gear in the garbage. Hot up-and-coming bantamweight Aljamain Sterling was quite vocal on Twitter, leaving no doubt that the Reebok deal was taking food off his table. The same goes for welterweight standout and Fight Night 60 headliner Brandon Thatch, who didn't take the news that he would be making $2,500 in sponsorship money per fight particularly well.
Middling but recognizable veterans are also getting in on the action. The Ultimate Fighter Season 10 runner-up Brendan Schaub said he's going to take a 90-plus percent hit in terms of his sponsorship money, going from making "six figures" per fight to $10,000. Similarly positioned fighters, such as Matt Mitrione and Tim Kennedy, made no effort to hide their dissatisfaction.
While they've been relatively quiet, high-profile imports Eddie Alvarez and Hector Lombard are also set to take a hard hit to the wallet. Both men are top-10 talents in their respective divisions but have spent the vast majority of their careers outside the Zuffa umbrella. Despite championship pedigrees and consistently strong booking, the fact that they combine for seven UFC fights means they are set to make the same kind of money as Garreth McLellan and Yaotzin Meza.
While it's impossible to estimate how many fighters' bank accounts will improve from this, it certainly seems like the majority are worse off.
Winner: International Newcomers
Fighting outside North America can be a tricky proposition and not just because of the notoriously awful judging or often-dangerous refereeing. It's tough on the wallet too.
Last year, UFC flyweight Zach Makovsky let it slip to MMAJunkie radio that fighters take a hit to their bottom line when they fight overseas. UFC President Dana White was less-than-sympathetic to those complaints, saying it wasn't his "f-----g problem" if fighters were making less money because of his company's actions.
Makovsky, though, is an American fighter who has spent almost his entire career fighting in America. There is an entire pool of talent from Europe, Brazil and Asia who will be competing on Fight Pass or throwaway Fight Night cards for the foreseeable future. The handful of fighters that have openly come out in support of the deal have all fit that bill.
Take Maryna Moroz, for instance. The little-known Ukrainian striker made her UFC debut last month, upsetting the heavily favored Joanne Calderwood. While she would wind up one of the night's biggest winners, taking home a $50,000 Performance of the Night bonus, her solid black trunks and pastel blue sports bra likely netted her a grand total of $0 in sponsorship revenue.
The $2,500 she makes from the Reebok deal will likely be a boon for her. Could she have potentially made more with an open sponsorship market? Possibly. Either way, she is making more money per fight now than she was a week ago.
Loser: Other Apparel Companies (And Fighters That Are Sponsored by Them)
Athletic apparel is an industry with basically no barriers to entry. With a few thousand dollars and a couple of licenses, anyone can start up his or her own company. It's no coincidence, then, that literally dozens of brands have popped up in the Octagon over the years.
Some big name companies, such as Nike and K-Swiss, have been seen at one point or another and will, of course, be completely fine with being banned from the UFC. Their investment in the sport has been minimal and the impact to their bottom line will likely be nil.
Any and all stakeholders of small, MMA-focused brands, however, are biting their nails right now.
The Reebok deal is a tough pill to swallow for fighters such as Chris Weidman and Benson Henderson, who get regular checks from Bad Boy and Dethrone, respectively. It's an even tougher pill to swallow for the pencil-pushers who work for those companies. It's a baseball-sized pill, however, for a fighter like Urijah Faber.
Faber is co-owner of Torque and uses the UFC as a platform to build his brand, sponsoring fighters like Nick Diaz, Chad Mendes and Joanna Jedrzejczyk. While fans can also spot the brand in extreme sports and professional wrestling, its bread is buttered in MMA.
For Faber, the Reebok deal is a quadruple-whammy. Not only will it prevent him from promoting his company. Not only will it largely force his company out of the sport it is built around. And not only will he lose out on making money through selling space on his trunks and banner. But it will force him to rep his competition.
Winner: Non-UFC MMA, Kickboxing, Pro-Wrestling Promotions
If you're a high-level fighter competing outside the UFC, the glitz and glamour of the Octagon just took on more of a matte texture.
For a long, long while, competing in the UFC was the most lucrative option available for mixed martial artists, in no small part due to how much could be made through sponsorships. When the UFC changed that, however, things changed quickly. KSW started outbidding the UFC for its local legends. One FC started signing big-name free agents. Bellator started trying to poach the UFC's own elite talent. Then it started succeeding.
Zuffa isn't the only power player at the bargaining table these days, and the Reebok deal may be a turning point in its ability to woo free agents.
Would Eddie Alvarez have resisted returning to Bellator if he was looking at making $2,500 per fight in sponsorship money? Would Brock Lesnar have even entertained the idea of a second UFC run if he was poised to make $5,000 per fight from Reebok instead of whatever ridiculous sums he gets from Jack Link's Beef Jerky and Jimmy John's? If the UFC renewed its commitment to being the one true home for elite-level MMA, how much extra money would it now have to throw toward Ben Askren to get him to leave One FC, where he can rep any sponsor he wants?
Quite frankly, if I'm Victor Cui, Scott Coker or Vince McMahon, I'm sleeping easier tonight. It's substantially less likely that my talent is going to pack up and head for the UFC.
Loser: Young Champions If They Lose
Falling down Championship Mountain has always hurt. The Reebok deal, though, makes it sting more than ever for the UFC's current crop of belt-holders.
Carla Esparza became the UFC's first women's strawweight champion last year by winning The Ultimate Fighter Season 20. After losing the title to Joanna Jedrzejczyk, however, she is poised to make $2,500 per fight in sponsorship money.
An historic former UFC champion is going to be getting paid $2,500 per fight in sponsorship money. Think about that.
It's even worse for Jedrzejczyk. Set to face Jessica Penne in Berlin next month, she is playing a high-stakes game against a tricky opponent three weeks before a guaranteed payday presents itself.
UFC champions Cain Velasquez, Chris Weidman and TJ Dillashaw aren't much better off, either, as they look at $10,000 per fight without a belt on their waist. That, by the way, is on top of the fact that the $40,000 per fight is likely far less than whatever they were already making.
Winners or Losers?: Reebok/UFC
The immediate reaction to the Reebok deal has been resoundingly negative. How the deal shakes out long-term, however, remains to be seen. Both the UFC and Reebok are pushing into uncharted waters, and that voyage could be a boon or a bust for one, both or neither.
Obviously, this is a hit to their respective public relations departments due to the unflattering numbers fighters like Brendan Schaub are presenting. While the story hasn't garnered mainstream attention at this point, one can only guess what will happen when the deal launches in July, when the NHL, NBA and NFL are all off.
Where it goes from there is anyone's guess.
The story of young, talented, dedicated athletes being forced to compete for pennies on the dollar with the backdrop of an ugly class-action lawsuit could serve as a rallying cry against the poor conditions so many fighters must compete in.
It could be the final straw for an organization that has, intentionally or unintentionally, historically worked against its fighters' best interests. Or, like so many other cases of athletes being left with a broken body and empty wallet, the general public could shrug it off.
Either way, the strengths and pitfalls of the UFC's uniform policy will be felt by the organization, by Reebok and by the fighters for years to come. Whether it proves to be a boon or bust for each party may take a bit to determine.