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CagePotato Open Discussion: With the Reebok Deal a Bust, Where Do We Go From Here?

(If you’re the UFC, I guess the answer is “Not for your fighters.” HI-OH!)

By David Golden

A week has passed since the pay structure of the UFC’s exclusive Reebok sponsorship was made public, and the immediate reaction to the deal from both fighters and fans seems to be…let’s say less than positive. Matt Mitrione and Brendan Schaub were among the vocal minority who seemed completely shocked by the figures, and it’s easy to see why. The structure of the deal effectively turns off an important revenue stream for many fighters and gives them a stipend that is predetermined and minimally effective in many cases. Making matters worse, outside brands have not only been banned as sponsors from UFC events but will no longer be able to participate as vendors at UFC fan expos.

This might have been the saving grace for some fighters hoping to bring in additional income, but that outlet has also been blocked. There has been talk of some secondary sponsorship coming some time down the road but all signs point to that being controlled by the UFC as well. If there isn’t an opportunity for fighters to source their own sponsorship or at least make the money they believe they are worth, then this deal could turn out to be disastrous for the UFC.

Let’s look at the numbers:

* 1 to 5 UFC bouts – $2,500 per fight

* 6 to 10 UFC bouts – $5,000 per fight

* 11 to 15 UFC bouts – $10,000 per fight

* 16 to 20 UFC bouts – $15,000 per fight

* 21 UFC bouts and above – $20,000 per fight

* UFC Title Challengers – $30,000

* UFC Champions – $40,000

This structure rewards fighters who have managed to maintain a career in the UFC for an extended period of time but does not take into consideration the revenue fighters had been making from sponsorships prior to the Reebok deal. Add to that the popularity and star power of some fighters compared to others, and it effectively devalues many of the athletes competing in the UFC. A prime example of this would be fast rising superstar Conor McGregor. McGregor has only five fights with the UFC but has proven to be one of the organization’s biggest stars. He could benefit greatly from being able to have his management find better deals for him away from Reebok but that is no longer an option under the terms of the new sponsorship contract.

Additionally, the likelihood of a fighter making it 20+ fights with the UFC is slim; not even Anderson Silva, who has fought for the UFC since June of 2006 has cracked the twenty-fight mark. This system is flawed and UFC officials know it. Unfortunately, the deal is done and with no fighters union to represent the athletes, this puts the onus square on the shoulders of those who made the deal.

Maybe this deal was made in haste? Did Reebok come to the UFC with this amazing idea and sweep Dana White and Lorenzo Fertitta off their alligator-covered feet? Maybe. But that doesn’t excuse the complete and utter lack of freedom fighters have been given as a result of this deal. Without allowing the fighters to offer input on the current financial value of sponsorships, it makes it seem like there is something they (and we) aren’t being told. During a conference call with select media members last week, UFC Chairman and CEO Lorenzo Fertitta, UFC President Dana White, and UFC Chief Operating Officer Lawrence Epstein made the point explicitly; the total value of this deal would be going directly to the fighters less the direct cost of running the program. But that statement was almost immediately proved false once the figures were released. As BloodyElbow previously pointed out:

The new figures only total up to about $7.5 million a year of the reported $70 million/6 year Reebok deal initially announced back in December, figuring for 20 title fights a year. That’s a lot less than it seems like the annual numbers should shake out to.

The UFC is a privately owned company and as a result, ownership has no reason to be anything but completely tight-lipped with regard to their finances, and the likelihood is things aren’t going to get any less opaque in the future.

The question is, does this exclusive sponsorship deal with Reebok have to end as poorly as it started? When Dana White talks about the mainstream acceptance of the UFC, he has often made the point that he wants to see it grow to the heights of the NFL or the NBA. If that is true, there is one thing White and his cohorts might consider doing which would be tremendously profitable for the athletes of the UFC.

The NFL has an exclusive uniform deal with Nike and the NBA has a deal with Adidas. However, the athletes in both of these leagues are allowed to have individual shoe contracts. These shoe contracts have become such big business that some players in the NBA are signing shoe deals that dwarf their game checks. Maybe a shoe deal with the UFC isn’t the best option, seeing as how Reebok is a shoe company, but why not allow UFC fighters to find their own glove sponsors? This doesn’t mean the sponsor has to make the glove — there are obviously regulations that must be met with regard to gloves and that would take precedence — but the sponsor’s logo could just replace the current boldly stamped UFC that adorns the gloves used in the Octagon now. This wouldn’t interfere with Reebok as they do not make fight gloves, and would allow the fighters the freedom to bring in an additional revenue stream, which many of them rely on.

Let’s look at some more numbers:

* Chris Paul – $4 million

* Blake Griffin – $6 million

* Dwight Howard – $6 million

* Carmelo Anthony – $9 million

* Derrick Rose – $21 million

* Kobe Bryant – $34 million

* Lebron James – $42 million

According to Forbes 2014 top ten list

These figures show what some of the top NBA players can pull down with shoe deal in a single year. While no UFC fighter will be pulling in bags of cash this large, that doesn’t mean that they can’t use the representation a company is offering. In the NBA, there can be anywhere from 360 to 450 active players in the league at a given time. A report from USA Today Sports showed that in August of 2014, there were 440 players who had brand support from footwear companies. That accounts for nearly every active player in the league at that time. This shows that there is a realistic chance for the UFC roster to find similar success. This sponsorship wouldn’t solve all the problems but it would certainly go a long way in showing the athletes that they still have other options in the sponsorship game.

As time passes, this deal will most certainly evolve and hopefully grow into a successful partnership for the UFC, Reebok and the UFC’s athletes. As it stands now, fighters are growing more vocal in their stance on the deal, be it supportive or unsupportive. Reebok is well aware of the reaction by fans and fighters over the announcement of the payout scale. It is hard to imagine that Reebok will sit by idly and allow a deal of this magnitude to fall apart before it truly gets moving. This deal is effectively acting as a pivot point for the world of MMA as we currently know it. Fighters from across the globe are waiting to see what the UFC does to adjust this situation while creating a more profitable world for the athletes.

If changes aren’t made swiftly, there is a chance that free agent fighters might not sign with the UFC and instead opt to sign with another company that is still allowing fighters to seek their own sponsorships. Take Olympic hopeful and recent Bellator signee Ed Ruth, for example, who has already spoken out against the tiered system the UFC is now offering. So now we sit at a crossroad of sorts waiting to see just what happens next. Is this the final straw that pushes fighters to unionize? Do Lorenzo Fertitta and Dana White have something up their sleeves? For now the mixed martial arts community waits on bated breath, hoping the next step is the one that fixes this oddly complex broken mess.

But what do you think, Nation? How could we go about fixing the current Reebok setup? Can we fix it at all? Discuss in the comments section. 

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