UFC Continues to Tighten Up Sponsor Restrictions
By Josh Stein on Jun 25, 2009
They came first for Affliction, and I said nothing...
Remember when Loretta Hunt wrote that piece about UFC press passes, and Monte Cox had that great quote about the fact that no one was making a big deal about the UFC squeezing out certain sponsors? Of course, it’s not just Affliction, a competitor, that the UFC is trying to keep off of their broadcasts, and the latest from Five Ounces points out an expansion in the UFC restrictions on in-ring sponsorships.
The UFC has added Dethrone, One More Round and Rolling Stone to its list of banned apparel for UFC 100 (Rolling Stone debuted at UFC 99, so it’s had a short lived stint, it seems). The list already includes several online poker sites, like Full Tilt Poker, Ultimate Bet and Party Poker.
The story also suggests that clothing sponsors interested in sponsoring a fighter would be required to pay a fee of $100,000 to the UFC.
This, it seems to me, is exactly what Monte was talking about when he said “I’m more concerned about who we can or can’t have as sponsors now, something that takes money directly from the fighters.” After all, many companies are going to be a little more wary about sponsoring fighters if they think it’s going to cost them a hundrend grand every time that fighter appears on a card.
While it’s hard to argue that the UFC doesn’t have a right to do what they’re doing, as they’re the one’s in charge of the broadcast and, as a result, have a right to choose what is broadcast on the airwaves they’re using, it does seem tyrannical to impose mandates about what fighters can and cannot wear. Apart from the general insensitivity, though, the financial repurcussions are seriously damaging, and need to be acknowledged.
As Cox points out, UFC fighters make money off of these sponsorship deals, and if they can’t contract with sponsors like Full Tilt or One More Round, then the competition among the companies that can sponsor fighters is slimmer. Companies can be more choosy about the fighters they sponsor, because there’s less competition, and they can offer fighters less money. This is the supply-and-demand impact on the market of fighter sponsorships, and this has an immediate impact on how sponsors go about seeking out fighters.
The real problem is that MMA fighters need that competition among sponsors, because it’s some of the only contractual competition they have where they’re looking at a potential for bidding wars and for serious growth as they switch from one sponsoring company to another. Fighters who are contractually bound to the UFC rarely have any sort of contractual competition as far as going to other organizations. UFC contracts are exclusive, when it comes to fights, so it’s not like a fighter can go and seek out another organization, not to mention that, since the UFC is the top organization in the world, most fighters don’t want to, knowing full well that if they turn their back on the UFC their in trouble.
This isn’t like baseball, where leaving one franchise for another, or stepping out on the free market, is going to open up a whole lot of options. With thirty-two teams, a good player going out on the free agency can expect contract offers from three or four, and get a potential bidding war as a result. Because of that, he doesn’t have to worry about his sponsorships quite as much, because he can make his money from the contract with the franchise he’s signed on to. A fighter leaving the UFC might get a sizeable offer from another show, he might not. The reality is, though, no one enters into a bidding war over fighters in the same way that they do over NFL players.
The bidding war presents a potential for increasing cash flow that doesn’t exist in the modern world of MMA and while it’s not the only reason that salaries are lower (certainly, the average cash flow within an NFL franchise is far higher than within a major MMA promotion, among the athletes and through the lucrative television contracts), but that’s part of the point here. Fighters need a way to maximize their income, and the UFC is restricting their ability to do that. It’s bad policy on the part of the UFC, but it doesn’t hurt them nearly as much as it hurts the fighters. The UFC’s ability to do business will not be seriously damaged by its policy about sponsorships. The fighter’s ability to maintain a substantial livelihood, on the other hand, will.
While the financial stuff doesn’t seem immediately relevant to us as fans (and perhaps its a little late waiting until the end of a piece to address this), it matters. If fighters make enough money, through sponsorships or through contracts, that they can afford to train full time at an earlier stage in their career (so that there are more fighters who can train full time, instead of just the top tiers), it improves the quality of that talent pool, the quality of that competition, and that’s good for us. It would be unfair to accuse the UFC of intentionally damaging our access to an improving quality of MMA, but it is not entirely unfair to assert that they are depriving fighters of their right to negotiate personal contracts with sponsoring companies. Whether the fighters choose to address this with open complaints, or whether it is simply fans discussing the issue, it is important to recognize that Zuffa LLC may be toeing the line, if they have not already stepped well over, with respect to their privledge as broadcasters.
Filed Under: MMA
Is there someone at the UFC that would be the appropriate contact for a semi-organized fan-based outcry against this type of behavior? Or at the very least perhaps demand an explanation?
JK, I don’t have many contacts at the UFC and wouldn’t want to jeopardize the few that I have by using them to lodge a complaint with the organization (the short version being I don’t want to get them fired, or get them pissed off enough at me to sever that tie).
That said, I do think a petition is in order. More importantly, I think that continued discussion of the issue will demonstrate how pissed off fans can get about this issue when properly informed. (and, believe it or not, the UFC does keep its eyes on the message boards)
I wonder if when one sponsor signs a deal with Zuffa do they try to get others banned? I know for example BSN nutrition has a deal with them and is now the “Official Supplement” line of the UFC. Now I am not saying that they did or would but what if they wanted to be exclusive and in their contract stated no other supplement company could sponsor a fighter? They probably have the cash to offer the UFC the money necessary to get it considered. Now what company would want to sponsor a fighter outside of the cage if they can’t get their logo inside? I know Affliction still sells GSP shirts and apparel although I don’t know if they are still sponsoring him (he also has lines with others). But he may be the exception. It would appear that until a viable alternative to the UFC were to appear for fighters, Zuffa will be able to do what they want!
Bill, I’m talking to some people to assess the contractual legality of these restrictions and
As far as I know, the UFC has no contractual ability to regulate the clothing worn by fighters outside of their broadcasts, which is how Affliction still sponsors GSP at external events.
I’m not sure how the UFC would go about dealing with sponsorships in supplement companies. That would require a serious leap into the personal lives of fighters that I’m not sure the UFC can pull off, but we’ll see.
It’s hard for guys who aren’t high-profile fighters like GSP. If they’re on a main event, the only visibility they might get is on the broadcast. GSP gets covered everywhere he goes, Jon Fitch and Josh Koscheck (while great fighters and certainly in the top tier athletically), don’t. T-shirt companies wouldn’t sponsor a guy like Kos if they didn’t think he would be allowed to wear it into the cage. Visibility during his fights are the basis for establishing that contract.
First off I don’t see what the UFC is doing with this as any different than what every other major sport does. For example NFL players all have to wear the Reebok gear on the field but they may have other clothing sponsors off the field. All major sports have restrictions like this. Most even worse than what the UFC is doing.
Having said that I gotta say I think this move by the UFC does sound a bit dubious on the surface given the current status of the way things work. However as is always the case with news like this I think the complete story isn’t there. Every place I have seen this news it seems everybody is jumping to list all the potential negatives of this. I don’t see anybody taking the time to analyze this and list any positives this could have.
Is there such a thing as fair and balanced writing in the MMA World?
Myself I am going to withhold judging these actions till I get some more information cause this just sounds like they are evolving into doing what every other major sport does.
Matt, we’ve had this conversation before (the thread is in the article I linked to at the top of this piece).
The UFC is making money off of this. That’s there reason for doing that. It’s there motivation for doing everything.
If the UFC wants to call this “evolving into the same stuff other major sports are doing” then they need to do it in a way that is legally and ethically sound. They need to have a clause in the contracts of the fighters contracts that garuntees them [the UFC] the right to approve sponsorships that take place during their airtime, and they need to compensate the fighters duly.
The fact is, many of these fighters have longstanding relationships with sponsors that are being thrown out the window over this issue. That’s a serious problem for the guys who aren’t making enough from the UFC to support the lifestyle that being a professional fighter demands, especially since the UFC already has clauses on organizational exclusivity and image rights.
The problem is that they’re doing this without the fighters knowing that this is going to happen.
Also, I resent the notion that this piece didn’t fairly represent the position of the UFC. Frankly, everything I stated about the financial implications for the fighters was true. The UFC’s motivation for doing this is obvious, they want the $100K per sponsor bonus. Both sides positions get time. Other than that, it’s an editorial, that’s what I write, and you know that, Matt, you’ve been here a long time.
“The UFC is making money off of this. That’s there reason for doing that. It’s there motivation for doing everything.”
Every business motivation is to make money isn’t it? How does this make the UFC different from every other successful business? Besides the more money the UFC makes the higher the fighter pay will be. Look at the rate fighter pay has risen the last couple years. As the UFC has started making money the fighter pay has increased exponentially. The UFC isn’t just sticking all that extra money in their pockets. They are putting a lot of that money back into the sport by trying to expand it globally and by raising fighter pay. Now is the bottom end salaries where I would like to see them… no way but it is improving. So I’m not going to condemn them for wanting to make money as long as they continue passing it along.
It’s almost like you are holding the UFC to some kind of higher standard on how they should be running their business compared to every other sport or business in the world.
“They need to have a clause in the contracts of the fighters contracts that garuntees them [the UFC] the right to approve sponsorships that take place during their airtime, and they need to compensate the fighters duly.”
Am I understanding this right. You think the fighters contracts don’t have clauses in them that states the UFC can deny any sponsor from appearing on their broadcast at any time? Cause that seems like something that is probably in there given past examples of this going all the way back to the Lindland deal.
I’m sorry if I offended you with the fair and balanced question but this editorial didn’t take into account any positives that could come from this also and I just wanted to point that out. I realize it’s an editorial and you don’t have to look at any positives if you don’t want to. However that doesn’t mean as a reader and commenter I don’t wonder about what positives this could actually have and if the positives don’t actually outweigh the negatives if they were both compared side by side.
Matt, you’re thinking that I’m upset at the UFC for trying to make money. That’s not it at all. The UFC should try and make money. They’re a business, that’s what they do. Also, addressing your last point, that’s the positive of this whole thing. The UFC is making money.
If the UFC makes money, generally speaking (not true under all circumstances, but just generally), that’s good for the fans. The problem is, sometimes the UFC has to make money at the expense of people.
In this case, they’re making money at the expense of the t-shirt companies (who I couldn’t possible care less about) and the fighters (who I do care about, because they’re a large part of the sport).
I’m talking to UFC agents right now about the potential for clauses within contracts.
Also, that’s not my understanding of the Lindland issue (though I’ve only heard Matt’s side, and am incredibly biased, as he’s a friend), but it’s also very old, and I’d like to take a look at the current contracts to verify the language they’re using now.
It somewhat baffles me why UFC would want to stir trouble in the ranks. All the othe rmajor sports have league sponsors AND allow players to have individual endorsements. UFC should be no different. If anything, it would raise the profile of the sport, possibly give their PPV’s a lift.
How do the other leagues do it? One word – UNION.
How does that 100k fee actually work? That seems to be very vague at this point and it would seem that information could play a big part in how this actually affects things.
Otherwise the only information I really see is they have added some names to the list of banned sponsors. Are those sponsors just banned from UFC 100 or all future events? What were they banned for? All of that would seem to be important information in all of this as well.
@mjs
“All the othe rmajor sports have league sponsors AND allow players to have individual endorsements. UFC should be no different.”
Your absolutely right mjs they shouldn’t be any different. But they are.
Here is where they are the same:
The UFC has it’s league sponsors just like NFL, NBA, and MLB. For the players of NFL, NBA, and MLB they can all have their individual endorsements outside of their respective leagues. The UFC allows the exact same thing for their fighters. They can have their individual endorsements outside the UFC.
This is where they are different:
The NBA, NFL, and MLB don’t allow any of their players to advertise on their broadcasts under any circumstances.
The UFC does allow it with some restrictions. Such as it can’t conflict with their league sponsors or their other interests.
Matt, I would imagine it’s a simply pay-to-play fee, where they just lay down the 100K and then they can do what they want with their fighters.
Generally when someone’s added to the “banned sponsors” list, it’s not provisional. I don’t think that the online gambling companies will come off (because they’re being banned for reasons other than the fee, from what I can tell), but if the only issue with the t-shirt companies is the fee, then I can see that being resolved once the cash ends up in appropriate hands.
Matt, athletes in other organizations are getting paid considerably more and have a negotiated minimum wage with the league that allows players to live the lifestyle of a professional athlete (and some to live the lifestyle of a celebrity). Since there’s no fighters union, MMA fighters become dependent on the sponsors. That’s the big issue here.
Of course, I’m not advocating for a fighters union, but at least for some united advocacy in the sport in order to improve the pay. But we’ve already had this conversation.
I agree athletes in other major sports get paid enough that they don’t need to sell advertising space on their uniforms. Not to mention all the union and collective bargaining stuff.
I understand the necessity for it in MMA at this point in time because of the level of pay. However looking at all the other major sports that isn’t something MMA fighters should take for granted in the future in my opinion. Whether that is right or wrong I don’t know. I just know looking at other sports what the UFC and other MMA Promotions are allowing sponsors to do in their sport isn’t the norm.
Allowing sponsors on broadcasts is more like the NASCAR model and NASCAR limits certain sponsors based on conflicts with their interests. No different that what the UFC is doing. It seems to be working just fine for NASCAR. The race teams are still finding enough advertisers to sponsor their teams.
Matt, that’s a fair point. I have no problem with the UFC restricting competitive sponsors. I understand not having Affliction t-shirts. Hell, I understand boxing out Full Tilt Poker because of the gaming interests of the Fertittas. I don’t get boxing out non-competitive organizations, though.
Also, the number of sponsors are being dramatically reduced. There aren’t as many companies that sponsor MMA fighters as there are looking to sponsor Nascar. I don’t think we’ll see “Clorox” printed on fight shorts anytime soon.
Come on Josh “Clorox” would be a great sponsor for a fighter.
What better way for Forrest Griffin to get the blood off his fight shorts than using “Clorox”.
I can see it now a commercial with Forrest Griffin the day after a big fight doing his laundry. Using “Clorox” to get the blood off his fight shorts. They could build a whole ad campaign around it.
It’s what they do in NASCAR. They get creative in their marketing. So maybe the MMA Agents just need to get better at doing their jobs. Maybe the MMA Agents need to get more creative and start looking outside the box for new sponsors to fill the void instead of standing back complaining about the ones they can no longer use.
Matt, as soon as I entered that comment, I realized that. Hell yeah! They should sponsor Kenny Florian, too. Dude always gets blood on his shorts. Not his blood, though.
I see it came out how the $100k fee will work. The $100k fee will give the right to sponsor on UFC events for 6 months.
The UFC held 10 events in the first half of 2009. So that would average out to a 10k per event fee. I don’t see that as being too outrageous when comparing it to what it would cost to run a commercial during a UFC Fight Night for example if one of the sponsors feeling left out wanted to do that instead.
The value to sponsor fighters is still there.
It’s not as though the value disappeared.
That said, it depends on the sponsorship. Guys who sponsor a dozen fighters (i.e. One More Round) absolutely see the value in having a deal with the UFC in place. Or, at least, they should.
However, companies which really only have one or two guys with any visibility are still basically paying $100K for one, maybe two, appearances, and that’s not really good.
Of course, the UFC doesn’t deal with commercials during UFNs, Spike does. It’s a network issue. It costs a lot of money to get Mike Goldberg to say your name thirty-five times during an event, but the guys aren’t paying an additional $100K for additional support by the UFC, they’re paying $100K to keep everything the way it was before, which is a little annoying.
That said, I couldn’t care less about the money lost by t-shirt companies. If Zuffa wants to bend the companies over a table, that’s fine with me. However, fighters are going to suffer a financial loss as a result, and I’m not particularly exuberant about that.
I’m not convinced that fighters will suffer a financial loss as a result of this.
To me this move will motivate the sponsors that do commit to the $100k fee to sponsor on every card in that 6 month span and to sponsor more fighters per card to get the maximum value out of that $100k fee. So I see this as having the potential to attract that higher level of sponsor that can afford the $100k up front fee and it will actually increase the amount sponsors spend on fighters. Sponsors will be committing to the sport instead of just doing one time deals like sponsoring 1 fighter for 1 event and moving on. I think it also sets up the potential “Clorox” type scenario we mentioned above. Since a sponsor basically has to commit to 6 months at least it could lead to UFC fighters getting more commercial ad campaigns that play out over that 6 month period.
ALTHOUGH I THINK WHAT THE UFC IS DOING IS IMMORAL (I FEEL STRONGLY ABOUT THIS AS OUR COMPANY HAD BEEN CONSIDERING THE IDEA OF SPONSORING FIGHTERS TO GET OUR BRAND ON NATIONAL TV) I WOULD LOVE TO BELIEVE THAT WE CAN BE HEARD IF WE JOIN AND I WOULD GLADLY PARTICIPATE IN ANY PETITION, WE COULD MAKE A CHANGE. UNFORTUNATELY, THE UFC LIVES OFF OF FANS AND THE ISSUE AT HAND ONLY AFFECTS A HAND FULL OF US SPONSORING OR LOOKING TO SPONSOR. SO THE AVERAGE FAN WILL NOT BE CONCERNED BY THIS IN ANY WAY. I JUST WISH ANOTHER ORGANIZATION WOULD GROW STRONGER I.E. M1, ELITE XC, ETC… AS TO MAKE THE UFC THEMSELVES HAVE TO FIGHT FOR THEIR FANS AND BECOME MORE “USER FRIENDLY.”