Tuesday 12 December 2017

A $70m deal with Reebok is a start, but UFC has a long way to go financially

With Reebok’s announcement this week on their sponsorship deal with UFC fighters the MMA column takes a look at UFC fighter pay and compares it with other sports.

Reebok announced this week a $70m sponsorship deal with the UFC
Reebok announced this week a $70m sponsorship deal with the UFC
Fergus Ryan

Fergus Ryan

Last December Reebok and the Ultimate Fighting Championship joined forces in a six-year partnership worth $70 million.

The global fitness apparel company have become the exclusive outfitter for the world’s leading mixed martial arts organization.

At the time UFC Chairman and Chief Executive Officer, Lorenzo Fertitta described the deal as “the biggest non-broadcast partnership that our company has ever signed”.

The deal has meant Reebok will become the exclusive “Fight Week” and “Fight Night” gear provider for all 585 UFC athletes. From July fighters will not be permitted to have any other logo or branding visible on their person other than Reebok and UFC.

Since the announcement fighters and media commentators have expressed mixed views on the deal.

The UFC have claimed they will not profit from the multi-year deal and will only cover any operating costs associated with running the program. The intention is to pass the majority of the sponsorship money to the fighters.

Initially it was rumoured that the amount fighters would receive from Reebok would be based on their ranking within their weight category. But last month the UFC confirmed the pay-outs would be based on tenure, the number of fights each athlete had with the UFC or with other fighting organisations owned by UFC parent Zuffa LLC.

This week the UFC contacted all their fighters to reveal the amounts they would be eligible to receive from Reebok after July:-

• 1 to 5 bouts - $2,500

• 6 to 10 bouts - $5,000

• 11 to 15 bouts - $10,000

• 16 to 20 bouts - $15,000

• 21 bouts and above - $20,000

• Title challenger - $30,000

• Champion - $40,000

This deal will alleviate the stress the lesser named fighters were facing in trying to gain sponsors for fights, which has declined in recent years.

A debuting UFC fighter could expect to make $8,000 for appearing, another $8,000 if they win and now an additional $2,500 from Reebok for wearing the official UFC kit. $2,500 would be a generous sponsorship amount for a newbie fighter appearing at the lower end of a UFC card.

Unless they had built up some strong name recognition outside of the UFC its unlikely they would have gotten this much from individual sponsor deals.

At the other end of the scale, Conor McGregor made a disclosed $170,000 (€150,000) - $85,000 for appearing, $85,000 for winning - for beating Denis Siver at UFC Boston in January, his fifth fight with the company. While there are no official figures for what he may have made in endorsements, it's probably safe to say he would have collected more than the $2,500 on the Reebok tenure scale.

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UFC featherweight Conor McGregor

Before we start to feel sorry for ‘The Notorious’ and his bank balance there are other ways to make money in the UFC. To compensate big name fighters who have already outgrown the new sponsorship structure Reebok have entered into specific sponsorship arrangements with a number of fighters, including McGregor. Though no figures were released Conor was happy with the bit of business that was done.

Read more: "It's a big step in my career" - Conor McGregor signs new sponsorship deal with Reebok

As the UFC is a private company they do not have to publish all manner of payments to its employees. For example, in addition to the disclosed pay the UFC also reward athletes with undisclosed locker room bonuses. They also reward fighters that draw viewers by including them in a portion of the Pay-Per-View revenue.

Ronda Rousey received a disclosed $130,000 (including $65,000 for winning) for beating challenger Cat Zingano in February. Zingano would have made $200,000 had she won (including $100,000 for winning). However, Rousey receives a share of the PPV revenue and reports suggest her earnings were closer to $1 million for the UFC 184 fight, much more than the disclosed $130,000.

Time will tell as to whether the Reebok deal is a good thing. What it has highlighted in MMA is although salaries have improved for fighters, particularly at the upper echelons of the sport in recent years, the amounts are still dwarfed by other sports.

Take #3 UFC ranked lightweight Donald Cerrone, who in the 12 months to January 2014 fought six times. This was a particularly active period for Cerrone. In an injury free year fighters average about three to four appearances in the Octagon. His disclosed UFC pay was approximately $850,000 for the six fights. If we (generously) assume he made the same in sponsorship it gives him a notional $1.7 million pay for 12 months activity.

Cerrone never had longer than 3 months between fights in this period. If you consider the normal fight camp or preparation time is 10-12 weeks, Cerrone was training for fights solidly for the year to make his $1.7m.

UK fighter, Michael Bisping is one of the highest paid athletes in UFC history with disclosed career earnings totalling approximately $5 million. This is spread across 23 fights in a nine year period. To give you an idea of how salaries have progressed, Bisping made $98,000 (three fights) in his first 12 months with the UFC in 2006-07. In the last 12 months UK MMA’s finest made $1.4m (four fights).

A few weekends ago Rory McIlroy collected $1.6m for winning the WGC Match Play tournament. He essentially earned almost the same as Cerrone and Bisping for a weekends work.

A recent survey by The Daily Mail in the UK found that the average Premiership footballer earns €3m  per annum. Of course, the likes of Wayne Rooney makes a multiple of that with his current contract worth approximately €20m a year.

Back in the US the NBA average salary was $4.9m for the 2013-14 season. Kobe Bryant was the top-paid player at $30m. Adidas signed a sponsorship deal with the NBA in 2006 estimated at over $400m for 11 years.

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Los Angeles Lakers guard Kobe Bryant (24)

The Major League Baseball average salary was $3.8m for the 2014 season. Cliff Lee had the highest salary at $25m.

The National Hockey League average salary came in at $2.6m for 2013-14 season. The top salary last year was for Shea Weber at $14m. Coincidently, Reebok also have a sponsorship deal with the NHL worth estimated at $200m per year.

Bottom of the pile was the NFL with an average salary of $2m for the 2013 season. The 2013 average is the same as it was in 2010. Jay Cutler had the highest base salary in 2014 at $17.5m. Nike’s deal with the NFL is estimated to be worth $1.1bn dollars for 5 years which began in 2012.  This replaced Reebok’s 10 year deal worth $250m.

Put in perspective, Cerrone’s actual earnings of $850,000 or notional $1.7m or even Reebok’s actual $70m deal over six years seems to pale in comparison to the figures other sports are dealing with.

Though progress has been made fighter pay has been a thorny issue for a number of years. The creation of a fighter’s union is something that crops up from time to time.

In December 2014, an antitrust lawsuit was filed against the UFC’s parent company, Zuffa by several former fighters (Cung Le, Jon Fitch, Nathan Quarry. Luis Vazquez, Dennis Hallman, Brandon Vera, Pablo Garza, Gabe Ruediger, and Mac Danzig). The plaintiffs claim that due to Zuffa buying up much of the UFC’s competitor promotions they have unfairly controlled their careers and potential to earn. A hearing has been scheduled for June 11th.

Given the growth in popularity of MMA and the global expansion of the UFC in recent years, we can probably expect the general level of pay to get better in the coming years. Whether they can catch up with the level of pay and sponsorship in other sports shall remain to be seen.

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