It’s the Sponsor tax. Those fees are outrageous. I’ve had a couple of sponsors that love what I’m doing, but the UFC won’t approve them, or they won’t pay $100,000 dollars to sponsor a fighter for a year. The return on investment doesn’t make sense.
A former UFC title contender said:
The thing that hurt fighters the most, in my opinion, was the sponsor tax. I went from one fight, before they brought in the rule, selling the space on the front of my shorts for $5,000. Then, six months later, when I went back to the same company for the same spot, because of the UFC fees they offered me $1,500.
The sponsor tax really makes things difficult. If these lower card guys could get sponsored by an up and coming brand in California that has five different t shirts for sale it would be better. It’s better to get $1,000 off of an up and coming company; they get some promotion, the fighter gets some cash, and it’s a new sponsor in the mix; another company that could potentially build up and be able to afford the UFC sponsorship fees.
The problem is, if you look at some of the companies that were around before, there were a lot of companies that couldn’t ever have sponsored a UFC fighter if the sponsorship tax was there in the first place. We wouldn’t have the big companies we have now. All of the companies that are still sponsoring fighters now have built that finance up because they didn’t have to pay those fees at the start. Now we’re effectively killing the whole MMA brand, the whole MMA community, because it’s very difficult for a business to get off the ground, because they can’t sponsor UFC fighters on TV.
Another former UFC title contender added:
The sponsor tax was huge. It was a huge step back. Sponsorship was getting to a place where smaller sponsors would pick you up for a year and pay you monthly. The tax pretty much erased that. Those sponsors no longer had the money to pay you residual income every month; they had to pay that money to the UFC now. You’re getting sponsored for 50% less per fight than they used to be able to afford. It had a huge impact on how much money you could make.
In the UFC before the sponsor tax, you could make roughly the same from sponsors as you could from your to show money. If you made $15,000 to show, you should be able to make $15,000 for sponsors. If you were making $100,000 in the main, you should be able to make the same from sponsors.
Other fighters think the UFC Sponsor tax did not have a significant impact on the declining amounts sponsors are paying, instead commenting that other factors were to blame.
A former top 10 UFC Fighter commented:
I don’t think the sponsor tax was really relevant, to be honest. I think the economy going bad and the landscape of the UFC changing, like the increasing number of events, is what really changed how much sponsors are paying. If a sponsor had a certain budget, even before the tax, even if the tax was never implemented, if you sponsor X number of fights and have $100,000 to spend on sponsorship, before the landscape changed there was only five events a year; there was a lot more money to give to each fighter in each event. Now there’s, say, 20 events per year, and that money has to be spread out over 20 events, so each fighter will get less.
An issue a number of fighters brought up was that of sponsor exclusivity. A number of former UFC fighters stated that they had sponsors refuse to sponsor them when they left the UFC because they had signed an exclusivity deal with the UFC.
One former UFC title contender said:
There’s something the UFC do that’s pretty dirty, that a lot of people don’t know about; not only do they make the sponsors pay just to sponsor fighters, which cuts into the money big time, they also make them sign exclusive agreements. When I left the UFC I lost a big sponsorship because they weren’t allowed to sponsor me outside of the UFC.
The UFC prevents sponsors from sponsoring fighters in other organizations. For my last fight, I only had a couple of sponsors, because all the other sponsors who pay well can’t sponsor me because of those exclusivity agreements.
A former top UFC contender had this to say:
Back in 2007 I would walk into a fight and someone would ask me to wear their logo for five grand. I just think that at that time there were less fighters, less shows and more people with money. At that time sponsorship was better than it has ever been.
The sponsor tax was a big blow. It affected everybody, not just UFC fighters. I and other fighters on my team had a relationship with a certain sponsor, but they couldn’t sponsor certain fighters because of their deal with the UFC. They told me, ‘hey, we can send you gear, but we can’t sponsor you for money because of the agreement with the UFC.’ There were fighters who were getting a thousand bucks here and there or $2500 here and there, those sponsorships disappeared.
However, he felt that in the long run it could be a positive step, saying:
I don’t disagree with the UFC doing it, though. If you look at other professional sports, that’s how they get big sponsorships. The NFL have Nike, certain college teams have Reebok, and it makes them look very uniformed and professional. It might hurt guys now, but in the long run it will clean up how the sport looks, and it will bring in bigger sponsors down the road. It might hurt us now, but it might help the next generation of ultimate fighters get lucrative sponsorship deals.
The Importance of Good Management
Good managers are incredibly important for fighters. The difference between making nothing at all for a fight, and making low 4 figures, is a manager. The difference between spending all your time training, and spending hours every week chasing people up and making phone calls, is a manager.
Scumbag managers get discussed and spoken about a lot, but good managers tend to go uncelebrated. Despite that, if you find a fighter with great sponsors, it’s almost a certainty he’s with a great manager. Below are some quotes from the fighters on how important a manager is.
A former UFC Title Contender elaborated:
A lot of bad managers started taking shitty deals, and now they’re doing condom depot at stuff for $250 or $500 bucks for the ass space. The ass space is the prime real estate on your shorts. You should be getting $3,000 – $15,000 for that space, but shitty managers were selling that off for $500 to scrape together whatever little bit they can.
I have a great manager, and he knows the value of holding your price. You may not get your price for a couple of fights, but when you do get your price, you will make way more money than if you sold out to that nobody, small-change sponsor.
I have a great management company and the agreement I have with them is if I find a sponsor on my own, I keep that money. If they find the sponsor, they get a cut. I’m lazy; I don’t want to deal with that stuff. It’s worth the percentage they take for them to go out and handle it.
A UFC Champion said:
I’ve never experienced any shady sponsorships at all. I owe that to my coaches and manager; he makes sure we make the right decisions. You can be sponsored by a hundred different people who say, “Hey, we’ll pay you this and this and this,” but next thing you know, you never get paid. I try to let my manager deal with that.
A contender who fights outside of the UFC explained what it was like when you don’t have strong management:
I’ve made about $100 in cash from sponsors for fights before. It’s almost my fault, because I love fighting and I only concentrate on that. I had a manager who just wasn’t really doing his job, but I’ve replaced him now, so hopefully things improve.
I don’t like to go up and tell people, “I’m a fighter and I need help” That’s so difficult for us to do as fighters. So we get managers, and then our managers sort it, but there’s no personal connection with a sponsor when a manager goes, so it’s easy for them to say “no” or just offer $200, because they don’t know you and there’s no connection between you.
Sponsor Relations and Missteps
When it comes to what sponsors expect from you, fighters have lots of different experience. The general feeling tends to be that lasting relationships where the fighter acts as a brand ambassador, rather than as a human billboard, work out better for both fighter and company.
A UFC Champion explained:
When we go after sponsors, we don’t just go after the money aspect; we want to make sure this is going to be a great partnership, something we can both grow together. Sponsor A have been with me for a while now, they give me the nutrition I need, and if they need me to go out and do autograph signings or anything, I’ll do it. You don’t see them branding me inside the Octagon, but outside of the octagon they do a lot of things for me, and I make sure I do my part in return
That kind of relationship is not easy to find, though. A few fighters feel that the strategies most sponsors take leave a lot to be desired. A top UFC Contender said:
I think a lot of sponsors in this industry don’t conduct themselves the way they should. I know quite a few people who just want to throw something on your shorts and hope to get a return on their investment. It’s kind of the shotgun approach, they shoot their brand everywhere and hope it just blows up, but there’s no strategy involved. I think that’s why the industry is where it is right now; there’s not really an active strategy or plan going into sponsorship deals. [On the other hand] most fighters say what are you going to do for me? I think fighters need to say ‘well, here’s what I can do for you.’
Another top UFC contender added:
Some sponsors are all about winners, but others get it and understand how their advertising dollars work.
The Reality of Getting Dollars from Sponsors
The truth is that for a lot of fighters, the majority of them, getting sponsors to pay in cash is an incredibly difficult thing. If you’re not fighting on a televised UFC card, most sponsors will only offer to pay you in gear.
A top prospect told me:
We definitely have to get out on the grind and claw and scratch to get sponsors. You have to be proactive as a fighter to get any. The majority, probably 75% of sponsors you approach, will only offer to pay you in gear rather than cash.
Another up and coming fighter said:
People don’t want to actually write checks. They’re willing to give up gear and stuff which is helpful, but not write checks.
In addition to this, most of the fighters we spoke to had been stiffed by a sponsor at one point or another. Several of them had several sponsors either not pay them or not send them gear. Some guys have had sponsors who owe them four and five figure sums refuse to pay, and others have been left without fight gear the night before the fight:
I had a sponsor who was supposed to send me shorts and gear the week before my fight to get all my other sponsors printed on, and they ended up not answering their phone and going MIA for the week. I ended up having to find another sponsor the night before the weigh-ins.
What Determines How Much Sponsors Pay
For up and coming prospects outside of the UFC, getting any cash at all from sponsors can be a huge struggle. There are a number of factors that affect how much a sponsor is willing to pay you, from who you fight for, to your place on the card, to how you’re performing. Here’s what fighters had to say about it.
A top UFC contender said:
A lot of it is how much social media you do for sponsors, and obviously winning is huge. The dollar figures change if you’re on the prelim cards; it’s much harder to get money. When I was on the undercard I was looking at the $3,000-$5,000 range, which was actually not bad for an undercard fight. Obviously if you’re on TV there is more value there, I would say it doubles if you’re on TV. Going up into the main card, the co-main and main event, that’s when can get more value from sponsors; about $15,000 to $20,000. You could look to get $30,000, but it depends on the company and the market. The market has changed so much in the past couple of years, it’s not where it used to be.
A former UFC fighter added:
There’s a difference between winning and losing. If you’re winning a lot, they’ll pay more, but if you’re losing… no. It’s not just about winning, sometimes it’s about how much media exposure you’ve had. Sometimes they’ll pay more for that.
A top Bellator fighter said:
For most people, from what I’ve seen, if you’re on the undercard, you’re not getting jack. If you’re on the main card you’re good.
A high profile UFC fighter had this to say:
Where you are on the card does affect how much you get paid. It depends on the sponsor, but coming off of a loss can absolutely affect your pay. Some sponsors are all about winners, but others get it and understand how their advertising dollars work.
Another former UFC fighter added:
How you’re performing definitely makes a difference. A lot of companies that put their money and brand out there only want to be on guys who are winning. No one wants to throw their brand out there on a guy who keeps losing. Being on TV definitely makes a difference as well. Outside of the UFC it’s not a huge difference, but it’s still definitely a difference.
A former UFC fighter disagreed that winning and losing had an effect on sponsor pay:
It’s not about winning, it’s about getting exposure. It’s about getting your fight on Facebook, your fight on TV and your fight on Pay-Per-View. That’s what really decides how much the sponsors are going to pay; the level of exposure you will give the sponsor. It depends on the sponsor and the deal you’ve worked out, but you can get $1,000 from a sponsor on Facebook, to $2,000 to the undercard to $3,000 to the main card.
A former UFC title contender agreed:
How hot you are, how popular and visible you are makes a huge difference. If you’re getting a lot of main event or main card fights, you’ll make more money. If there is buzz around you, if you’re on TV, on Inside MMA and stuff, it doesn’t matter if you’re winning or losing. If your name is out there, you’ll get more sponsorship. As the saying goes, any press is good press.
My Thoughts and Musings on the Future of Sponsorship
Since the sponsor heyday of the late 2000’s, sponsor pay has decreased for almost everyone. The figure given most often was by 50%. Some blame this on the UFC sponsor tax, some on the proliferation of new organizations and cards, and some on the global economic downturn. I suspect the truth is a combination of all three.
Different fighters disagree on whether the sponsor tax is a good or a bad thing. Some feel it will help to standardize the sponsors of the UFC and help to attract and keep big name, blue chip sponsors. Others feel it will inevitably lead to less competition between sponsors for fighters, and as a result less money for fighters. Most fighters feel that it has had a negative impact so far.
I feel that while the UFC sponsor tax was undoubtedly a good piece of business for the UFC, both from a financial standpoint and the standpoint of controlling their brand image, it did hurt the fighter’s bottom line. It would be nice if the UFC was to use some of the sponsor tax money to invest in things that help the fighters find and cultivate relationships with good sponsors. A fund to help cover fighters who get stiffed by sponsors would be a good start.
10% of the UFC’s sponsor tax income would probably be in the range of $500,000 per year. If that was distributed among the lowest paid 50% of the roster, it would give each fighter (assuming they fight 2.2x per year, which was the average for 2012), a raise of $1k per fight. For the average guy on $6k/$6k that would amount to a more than 10% wage rise, helping massively with training expenses.
With that being said, the UFC’s sponsor tax and fighter insurance policies came into effect around the same time, and it’s possible that the sponsor tax is the money the UFC earmarked to pay for the insurance. If so, bravo.
More resources made available to fighters and their managers in terms of sponsor contacts and training on how to make the most of sponsor relationships would also be good. Perhaps even a centralized system inside the UFC where sponsors could tell the UFC, “Hey, we want to sponsor X fighters on this card and have a budget of Y” which fighters could look at and apply to could be a good idea.
Sponsorship is an area of MMA that I feel is bordering on the precipice of explosive growth. While the sponsor tax had a negative short term effect on it, if it leads to the proliferation of large blue chip brands sponsoring fighters, it could have a great effect. Not just in terms of the money top fighters can make, but also in terms of the perception of MMA; if Coca Cola, Nike and Apple are sponsoring fighters, other companies will start to pay more attention to it as a viable option.
There are many markets out there not yet being exploited in MMA, but which share the same demographics. Some fighters are sponsored by Alienware, or Microsoft. Videogames have huge demographic crossover with MMA and that seems like a perfect place for managers to look for sponsorship opportunities. TV shows, movies and male grooming are other areas that seem much underrepresented in MMA. I think that’s going to change.
My hope is that in the near future, we will see more companies in diverse industries start sponsoring MMA fighters, and filling the vacuum left by the UFC sponsor tax. I hope to see more MMA-centric companies that follow the old Tapout mantra of supporting local fighters and prospects, to allow them to train full time and reach their potential, and I hope that the companies displaced by the UFC sponsor tax don’t give up on sponsoring MMA, but instead form deeper brand ambassador relationships with fighters and local promotions and take advantage of the loyalty fans feel to fighters.
Finally, I hope more fighters become more media savvy and realize they have an audience who will watch them spar in their sponsor’s gear; that will check out their YouTube videos and their appearances on TV and radio, and fans who will listen if they give genuine reviews of the products they receive and use from sponsors.