basblue
14-09-2011, 19:44
It's a shirt some fighter wears to the cage and then struggles to pull back on to his sweaty torso in time for the post-fight interview. It's a banner his cornermen unfurl behind him during the pre-fight introductions. It's a website on the seat of his shorts.
You see it, even if you never think about it. But because you see it, because you're watching, fighters are getting paid. They might make anywhere from a couple grand that's barely worth mentioning after their manager takes a 20 percent cut, to hundreds of thousands of dollars on an endorsement deal that will change their lives forever.
For many fighters, sponsor money means everything. It's the difference between prospering and just getting by. It's something they talk about among themselves, but rarely in public. It's the hidden undercurrent of the MMA economy.
As fighter agent Lex McMahon explained, "Younger guys who are just starting out in their careers and are in their first contract with the UFC, they're probably making quite a bit more in sponsors than they are from fighting."
We understand why they do it, but I also can't, in good conscience, pay that.
-- Nick Palmisciano on Zuffa's discretionary sponsor taxAll this, just to reach you, the fan, who hardly gives any of it a second thought. Is it worth it? That depends on who you ask. Do fighters depend on it for their financial well-being? Absolutely. And as you learn when you take a closer look, it's a complex economy buzzing with frenzied activity behind the scenes of every MMA event you watch.
THE Cost
If you're a company looking to sponsor a UFC fighter, the hit to your pocketbook varies depending on everything from the fame and popularity of the fighter you're doing business with to the location of your logo. Walk-out T-shirts can be among the most expensive items, sometimes edging into the six-figure range, while a small decal on the thigh of his shorts might only run you a couple thousand dollars.
"Where you want the placement depends on how much you want to pay," said Training Mask CEO Casey Danford, who added that he usually prefers to put his logo on the rear of the shorts when sponsoring a wrestler, and on the crotch when sponsoring a striker.
"Sometimes guys come to us because their sponsors got kicked out of the UFC or because they took a fight last minute and don't have any other sponsors," Danford said. "That does happen. On the last-minute deals, it's not like we're giving them top dollar, because they're coming to us at the last minute. We work with the fighters and they work with us, because they know that two weeks before a fight, most of our budget is already used up."
The UFC requires fighters to get prior approval for every sponsor they intend to represent on their shorts and banners -- hence the threat of being "kicked out" -- but just to get the right to be seen on a UFC broadcast most companies pay a fee to the UFC -- the discretionary sponsor "tax" that was also recently instituted in Strikeforce after Zuffa bought the promotion.
While few sponsors or agents wanted to discuss actual figures on the record, most put the cost of the tax at about $50,000 per year for the majority of apparel and supplement companies in the UFC, though the fee has been known to vary according to the sponsor and the situation, sources said.
That sponsorship fee alone recently chased military-themed clothier Ranger Up out of the fight night sponsorship business. Despite his company's long-standing relationship with Strikeforce fighter and Army Green Beret Tim Kennedy, Ranger Up's Nick Palmisciano said he couldn't justify the cost of putting a logo on Kennedy's shorts for his recent Strikeforce bout with Robbie Lawler.
"A lot of people were fired up about this, but we're not in any way angry at Zuffa at all," Palmisciano said. "We understand why they do it, but I also can't, in good conscience, pay that."
The companies who can afford to pay [the sponsorship tax], usually you have less risk with them, because you know they're a better capitalized company.
-- Dean AlbrechtSince Palmisciano's company sponsors relatively few fighters, he explained, the potential benefit just didn't justify the cost. Six months might go by without a single one of his guys fighting, but he'd still be required to pay the tax for that period.
"When you think about what that tax costs us per fighter as opposed to what it costs another brand like Dethrone, who's sponsoring two, three, four fighters every event, for us there's almost no return on in-fight sponsorship," Palmisciano said.
The effect of the tax is and will continue to be most noticeable on Strikeforce cards, according to many fighter agents and industry sponsors. While it might be worth it for some companies to pay the fee in order to reach the larger UFC audience, the smaller viewerships for Strikeforce on Showtime aren't necessarily valuable enough to justify the expense for many others, meaning Strikeforce fighters take a big hit in sponsor pay.
At the same time, according to fighter agent Dean Albrecht, there are benefits to Zuffa's sponsor tax, even if it shrinks the pool of available sponsors.
"Not all up-and-coming companies can afford to pay [the tax]," Albrecht said. "But the companies who can afford to pay it, usually you have less risk with them, because you know they're a better capitalized company. So believe it or not, the UFC in effect is protecting the fighters by putting a monetary entry fee to the sponsorship game. Before, when anybody could sponsor a guy, you'd have companies not paying and that hurts everybody."
In fact, in the days before the tax, non-payment was more of an issue, according to both sponsors and managers. Most of the deals are constructed so that sponsors pay after the fights rather than before, and some were offering more money to fighters than they actually had, betting that they'd sell enough merchandise in the weeks following the fight to come up with the fighter's fee.
Ken Clement, co-owner of MMA equipment manufacturer Hayabusa, said the tax has largely chased those companies out of the sponsorship game. Before, Clement said "we actually had managers come to us and say, 'Hey, do you know what happened to this company? They owe us money.'"
Part of the problem, he added, is that some companies have unrealistic expectations to go with their pricey sponsorship goals.
"Some of these companies think they're going to come in here and get these huge, immediate results, and that's their plan for how they're eventually going to pay these guys," said Clement. "A lot of them are agreeing to deals that they're never going to be able to afford to pay. The UFC putting that tax into place is like, if you can't afford to pay that tax, you're probably not going to be able to pay your fighters."
You see it, even if you never think about it. But because you see it, because you're watching, fighters are getting paid. They might make anywhere from a couple grand that's barely worth mentioning after their manager takes a 20 percent cut, to hundreds of thousands of dollars on an endorsement deal that will change their lives forever.
For many fighters, sponsor money means everything. It's the difference between prospering and just getting by. It's something they talk about among themselves, but rarely in public. It's the hidden undercurrent of the MMA economy.
As fighter agent Lex McMahon explained, "Younger guys who are just starting out in their careers and are in their first contract with the UFC, they're probably making quite a bit more in sponsors than they are from fighting."
We understand why they do it, but I also can't, in good conscience, pay that.
-- Nick Palmisciano on Zuffa's discretionary sponsor taxAll this, just to reach you, the fan, who hardly gives any of it a second thought. Is it worth it? That depends on who you ask. Do fighters depend on it for their financial well-being? Absolutely. And as you learn when you take a closer look, it's a complex economy buzzing with frenzied activity behind the scenes of every MMA event you watch.
THE Cost
If you're a company looking to sponsor a UFC fighter, the hit to your pocketbook varies depending on everything from the fame and popularity of the fighter you're doing business with to the location of your logo. Walk-out T-shirts can be among the most expensive items, sometimes edging into the six-figure range, while a small decal on the thigh of his shorts might only run you a couple thousand dollars.
"Where you want the placement depends on how much you want to pay," said Training Mask CEO Casey Danford, who added that he usually prefers to put his logo on the rear of the shorts when sponsoring a wrestler, and on the crotch when sponsoring a striker.
"Sometimes guys come to us because their sponsors got kicked out of the UFC or because they took a fight last minute and don't have any other sponsors," Danford said. "That does happen. On the last-minute deals, it's not like we're giving them top dollar, because they're coming to us at the last minute. We work with the fighters and they work with us, because they know that two weeks before a fight, most of our budget is already used up."
The UFC requires fighters to get prior approval for every sponsor they intend to represent on their shorts and banners -- hence the threat of being "kicked out" -- but just to get the right to be seen on a UFC broadcast most companies pay a fee to the UFC -- the discretionary sponsor "tax" that was also recently instituted in Strikeforce after Zuffa bought the promotion.
While few sponsors or agents wanted to discuss actual figures on the record, most put the cost of the tax at about $50,000 per year for the majority of apparel and supplement companies in the UFC, though the fee has been known to vary according to the sponsor and the situation, sources said.
That sponsorship fee alone recently chased military-themed clothier Ranger Up out of the fight night sponsorship business. Despite his company's long-standing relationship with Strikeforce fighter and Army Green Beret Tim Kennedy, Ranger Up's Nick Palmisciano said he couldn't justify the cost of putting a logo on Kennedy's shorts for his recent Strikeforce bout with Robbie Lawler.
"A lot of people were fired up about this, but we're not in any way angry at Zuffa at all," Palmisciano said. "We understand why they do it, but I also can't, in good conscience, pay that."
The companies who can afford to pay [the sponsorship tax], usually you have less risk with them, because you know they're a better capitalized company.
-- Dean AlbrechtSince Palmisciano's company sponsors relatively few fighters, he explained, the potential benefit just didn't justify the cost. Six months might go by without a single one of his guys fighting, but he'd still be required to pay the tax for that period.
"When you think about what that tax costs us per fighter as opposed to what it costs another brand like Dethrone, who's sponsoring two, three, four fighters every event, for us there's almost no return on in-fight sponsorship," Palmisciano said.
The effect of the tax is and will continue to be most noticeable on Strikeforce cards, according to many fighter agents and industry sponsors. While it might be worth it for some companies to pay the fee in order to reach the larger UFC audience, the smaller viewerships for Strikeforce on Showtime aren't necessarily valuable enough to justify the expense for many others, meaning Strikeforce fighters take a big hit in sponsor pay.
At the same time, according to fighter agent Dean Albrecht, there are benefits to Zuffa's sponsor tax, even if it shrinks the pool of available sponsors.
"Not all up-and-coming companies can afford to pay [the tax]," Albrecht said. "But the companies who can afford to pay it, usually you have less risk with them, because you know they're a better capitalized company. So believe it or not, the UFC in effect is protecting the fighters by putting a monetary entry fee to the sponsorship game. Before, when anybody could sponsor a guy, you'd have companies not paying and that hurts everybody."
In fact, in the days before the tax, non-payment was more of an issue, according to both sponsors and managers. Most of the deals are constructed so that sponsors pay after the fights rather than before, and some were offering more money to fighters than they actually had, betting that they'd sell enough merchandise in the weeks following the fight to come up with the fighter's fee.
Ken Clement, co-owner of MMA equipment manufacturer Hayabusa, said the tax has largely chased those companies out of the sponsorship game. Before, Clement said "we actually had managers come to us and say, 'Hey, do you know what happened to this company? They owe us money.'"
Part of the problem, he added, is that some companies have unrealistic expectations to go with their pricey sponsorship goals.
"Some of these companies think they're going to come in here and get these huge, immediate results, and that's their plan for how they're eventually going to pay these guys," said Clement. "A lot of them are agreeing to deals that they're never going to be able to afford to pay. The UFC putting that tax into place is like, if you can't afford to pay that tax, you're probably not going to be able to pay your fighters."