Now that we know the numbers, is the Reebok deal good for UFC fighters?

Carlos Condit

Shortly after UFC executives held a conference call to explain why they thought the Reebok deal was still a good outcome for fighters, despite payout figures that drew immediate and widespread criticism from current and former fighters across social media, I texted a well-known manager to ask what he thought his odds were of maintaining current sponsorship deals for his clients outside the cage once the exclusive Reebok sponsorship kicks in – something UFC President Dana White insisted fighters would be able to do just like in “any other sport.”

“LOL,” buzzed the response. “Is that a serious question?”

For a day that everyone in the MMA industry knew was coming, Wednesday’s big financial reveal still left a lot of fighters and managers feeling surprised, if not downright shocked. It sent ripples through the UFC pond that we still haven’t seen the end of, with numbers for fighter sponsorship pay that were lower than many expected.

A payout of $2,500 for fighters with fewer than six fights under the Zuffa banner? Several managers told me they represented guys in that category who were currently making four or five times that in sponsorship money for each fight. One, who requested anonymity due to the sensitive nature of the information, said he had a bottom-tier fighter poised to make at least $20,000 in sponsorships for his next fight.

To equal that figure in the UFC’s Reebok era, a fighter will have to reach the highest experience-based tier, which tops out after 21 fights in the UFC. Just two percent of the current active roster falls into that category, according to Reed Kuhn of Fightnomics. Those fighters who do reach those top tiers are generally more established and more well-known, which usually equals higher payouts from sponsors. Now even a champion who fights three times a year only stands to make $120,000 from fight night sponsorship.

“Are those numbers in line with what you’d expect, what they’re getting now?” asked Malki Kawa, who manages former UFC light heavyweight champion Jon Jones, among others. “The answer is no. It’s no on the high end, and no in the tier just below that. The middle of the pack on down, they’re the ones who might stand to win. But guys like Benson Henderson, Carlos Condit? This deal makes absolutely zero sense for them. Just zero sense.”

Condit is a useful example. Between his WEC and UFC fights, he has 15 bouts that count toward his Zuffa tenure. His next UFC fight will put him in the fourth tier, for fighters with 16-20 bouts, meaning he’ll get $15,000 per fight under the Reebok deal. Even if he fights three times a year, which he hasn’t managed to do since 2007, that’s only $45,000 in sponsorships, which is paltry compared to his past sponsorship earnings, according to Kawa.

“If I’m (Condit), and I know I’ve made a couple hundred grand each year just in sponsorships, and now you’re telling me I can’t make more than 20 grand per fight unless I’m fighting for a belt or I become the champion,” Kawa said, “that’s a huge drop in income.”

It’s also not that far out of line with what you see in other major sports, according to Kawa, who’s also worked with NFL players. Aside from the few superstars in each sport with lucrative endorsement deals, most NFL or even NBA players are not “making what you think” from sponsorships, he said. Plenty are settling for free Nikes while receiving no cash, which is fine if you’re making more than $400,000 a year as a league minimum.

But, added Kawa, “The salaries in (the MMA) industry are not what they are in those other sports.”

It’s a different world for fighters. In recent years, many UFC fighters have derived at least half their annual income from sponsors. At the peak of his career, according to former UFC middleweight and current UFC commentator Brian Stann, he could triple his fight purses with earnings from sponsorships and endorsement deals.

“Sponsors were my real value,” said Stann.

Fighters who come into the UFC in the Reebok era will face a much different financial reality. It’s a shift that could have a domino effect throughout the industry, altering everything from contract negotiations to the role managers play in fighters’ careers.

As veteran manager Monte Cox explained, the loss of sponsor income could very well affect how free-agent fighters weigh their options when it comes time to discuss a contract with the UFC or one of its competitors, like Bellator MMA.

“It would be a negotiating point,” Cox said. “If I can’t get sponsors, where can we make that (money) up?”

The structure of the Reebok pay also presents logistical challenges for the contractual agreements many fighters have with their management. It’s not uncommon for managers to take a 10 percent cut of all money a fighter makes through his UFC contract, including purses and bonuses, while exacting a 20 percent fee for sponsorships. That made sense in the past, because drumming up sponsors was where a manager really worked up a sweat for his clients.

But the Reebok pay is guaranteed, and based purely on experience under the Zuffa banner. Managers don’t do anything to generate that money, so what percentage of it are they entitled to?

It’s a question that many managers said they hadn’t fully fleshed out with their clients, but most of those I spoke with said that, at least for now, they don’t plan to take any cut of their fighters’ Reebok money.

“That’s their money, as far as I’m concerned,” said Kawa.

Those with separate Reebok endorsement deals, such as UFC featherweight contender Conor McGregor, will receive their tenure-based pay in addition to what they’ve agreed to with Reebok independently. There’s also the chance to court other UFC sponsors, such as Monster Energy, which plans to sponsor 11 UFC fighters, according to a company representative.

Similarly, as UFC executives were quick to point out, those fighters with endorsement deals that go beyond a patch on their shorts come fight night are free to keep those sponsors as an outside revenue stream – if they can.

That’s a viable possibility for certain fighters, maybe. If you’re a company that sponsors UFC middleweight champ Chris Weidman, for instance, or former lightweight champ Frankie Edgar, the opportunity to use their names and likenesses beyond fight night or fight week is probably still worth paying for. Certain fighters have value far beyond that of a walking billboard on a UFC broadcast. Others will have a harder time making that case.

That’s where the Reebok deal gets tricky. For those fighters in the middle or lower tiers, the money they were receiving from sponsors might not have come in huge sums, but it did come in bunches. Even if they weren’t making more than a couple thousand dollars from any one sponsor, they had the ability to cobble together several sponsors for a decent payday in the end.

The UFC’s exclusive deal with Reebok whittles the field down. Even if Reebok pays fighters on a level commensurate with what they were making from any one sponsor in the past, it still represents a net loss of income. Of all the managers and fighters I spoke to, there wasn’t one who said they expected the Reebok deal to represent anything but an overall decrease in income.

While a deal like this might have been inevitable as the UFC and the sport of MMA both grow and develop, and while there might be positives to cleaning up the look of the sport with a major sponsor, you can’t expect people to be happy when you explain that they’re about to receive less money for the same amount of work.

Not that there aren’t some upsides. As several managers noted, there is a value in the guaranteed nature of the Reebok pay. No longer will fighters have to worry about sponsors who promise big money and never pay up. Gone are the days of hounding sponsors for 60 or 90 days after each fight, just trying to get the money you’re owed. The UFC has promised to pay fighters within 10 business days of their fight, which helps fighters plan for the near future with a more accurate idea of how much money they’ll have in their bank accounts.

It also eliminates a lot of the annoying hassles of dealing with sponsors, according to UFC lightweight Joe Lauzon. He was upset when he heard that the pay would be based on UFC rankings, and said he planned to ask for more base pay to make up for it when he negotiated a new contract with the UFC this past March.

But the experience-based pay system was more to Lauzon’s liking. He’s been averaging around $24,000 per fight in sponsors lately, he said. Now, with his 18 UFC fights, he stands to make $15,000 per fight.

Joe Lauzon

“So you say 15 (thousand dollars) as opposed to 24 (thousand), that’s kind of crappy,” Lauzon said. “But I would get shorts and shirts from a sponsor, and we had to pay to get things printed, and a lot of times it would be last-minute. So a pair of shorts could cost me a couple of hundred dollars to get printed. You’ve got to pay a manager or an agent 20 percent for sponsors, and that ate up a chunk of it. It’s definitely a little bit lower, but I don’t have to pay that 20 percent, I don’t have to hustle, I don’t have to pay for shorts. There’s a lot more crap that I don’t have to deal with doing it this way. We’re making a little less money, but I don’t think it’s the end of the world. I think that overall, it’s going to be very good for the sport and for the brand.”

Still, you have to consider how much that tradeoff is really worth, since it’s likely to vary from fighter to fighter, as will the royalties from branded Reebok gear featuring a fighter’s name and likeness.

Would you take a 10 percent cut in pay if it meant the difference between receiving your money in two weeks, guaranteed, hassle-free, rather than in two months, with the possibility that you might not get paid on occasion? How about a 25 percent cut, or 50 percent?

How about if the choice isn’t yours to make?

That’s the other aspect of this economic shake-up where you get the sense that we haven’t yet seen all the ramifications that will result from it. The fighters whose finances will be affected by this deal? Most of them signed their current contracts months or years ago, with a different understanding of what they stood to make. Potential sponsorship income depending on fight card placement was an implicit or even explicit aspect of contract talks, according to several managers.

“There was a point when the UFC themselves, when you were negotiating a contract they’d tell you, ‘Hey, we’ll put you on the main card and you’ll make an extra 30 or 40 grand in sponsorships,’” said Kawa.

Now the landscape has changed right under fighters’ feet. That could create an opportunity for competitors like Bellator to lure fighters with promises of greater freedom on the sponsor market, or more in upfront pay to make up for what the UFC’s deal with Reebok will eventually cost them.

The UFC’s partnership with Reebok is a knuckleball, in that sense, and no one is entirely sure yet how it’s going to break. As UFC CEO Lorenzo Fertitta said during Wednesday’s media call, the UFC will review the payout figures as the deal progresses, but it considers this “an investment that we’re making in the future.”

And, as several people acknowledged, there’s reason to be optimistic about that future. Just don’t expect it to silence the concerns of the present.

MMAJunkie’s Steven Marrocco contributed to this story.