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When the Reebok deal was announced, compensation was described as following a tiered structure, based on ranking. The rankings are subjective to a degree, but beyond that, the tiered structure was flawed.
Take Joe Lauzon. He has fought in the UFC since 2006, winning Submission of the Night six times, Fight of the Night six times, and KO of the night once. And in 2012 he won fight of the year vs. Jim Miller. Joe Lauzon is the all-time performance bonus leader in UFC history.
He also runs the highly-regarded Lauzon MMA. One of his student, Joe Proctor, has been fighting in the UFC for under three years, going 3-2 so far. As both are outside the top 15, their Reebok compensation would be identical. That is not fair and reasonable.
Now the highly regarded Street and Smith’s Sports Business Journal is reporting that a better plan is in place. Compensation will be based on tenure, as defined by number of fights, including bouts in Strikeforce and the WEC. Title fights count for more. The new tiers are:
1-5 fights
6-10
11-15
16-20
21+
Since the UFC agreed to its first exclusive outfitting deal with Reebok in December, executives from the promotion’s newly formed equipment department have spent hours meeting with fighters, their cornermen and their managers, explaining how their lives will change when the Reebok deal takes effect in July. Along the way, one issue has become clear: Fighters want to know how they’re going to be compensated under the six-year,
$70 million deal — and their thoughts on the subject have prompted a change in the payment model that the UFC originally developed.
Observers are asking how fighters’ compensation under the Reebok deal will compare to what they were being paid previously by individual sponsors to wear their logos in the Octagon. While most UFC fighters had once generated the majority of their income by wearing sponsors’ logos, they now are prohibited from wearing those logos during any UFC Fight Week events, including public training sessions, news conferences, weighins and fights.
Authentic Sports Management CEO Glenn Robinson, who represents a group of fighters known as the Blackzilians across several combat sports, said that the sponsorship money fighters previously depended on has declined in recent years.
There was once a real big heyday of sponsorships. There was a time when companies like Tapout were paying $50,000 to $75,000 per fight, and people were living off that sponsorship money, Robinson said. But those days are gone. That income level of sponsorships is not there anymore. It doesn’t exist, and a lot of fighters still count on that money.
You have a lot of companies that would come in for a brief period of time. They’ll sponsor really heavy for some period of time and then they go away. They don’t stick with the league for a long time because there’s not a lot of return on investment for them, whereas for Reebok, there’s a return on investment. The fighters are all getting behind a brand, the brand is going to be available for sale, so there’s a way for them to recoup their money, and there’s a cycle for the funds. Reebok makes an investment, the fighters get money, Reebok gets their money back by sales.
Meanwhile, bringing on an official outfitter should help elevate the UFC toward the same echelon as other major sports leagues from a presentation standpoint.
The fighters doing individual sponsorship deals and things like that … has been a tough look for the UFC, said Mike Lunardelli, Reebok director of combat training. It’s been a little bit all over the place. That was one of the things we talked about: How do we clean that up?
Each fighter’s kit will feature the UFC logo, Reebok’s logo, a single sponsor logo determined by the UFC, and the fighter’s full name.
For Reebok, partnering with the UFC represents an opportunity to target a younger audience as well as to further itself as a key player in the fitness space. Lunardelli cited the company’s market research as showing that 35 million people around the world are training like fighters, 40 percent of whom have begun doing so in the past year. As we saw that happening, we wanted to find a way to get into this space, Lunardelli said.
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Under this new plan, Lauzon, with 18 fights, even has a final level to move up!
