The UFC released a compensation plan to its roster of athletes on Tuesday, outlining how the promotion intends to distribute revenue from a multiyear uniform deal with Reebok scheduled to go into effect July 6.
Rostered UFC fighters will receive sponsorship compensation based on the number of fights he or she has appeared in under Zuffa-owned promotions. Zuffa, parent company of the UFC, has owned and operated several other fight promotions, including Strikeforce and the WEC.
There are seven different tiers within the compensation plan. Figures are determined on a per-fight basis, consisting of $2,500 for 1-5 appearances, $5,000 for 6-10, $10,000 for 11-15, $15,000 for 16-20 and $20,000 for 21 bouts and above. If a fighter is challenging for a UFC title, he or she will receive $30,000. Champions receive $40,000.
The UFC has maintained that all revenue generated from the rights agreement with Reebok will go to athletes. The deal, which extends through 2020, is reportedly worth $70 million.
"Obviously, we are a private company but I can tell you this," UFC CEO Lorenzo Fertitta said. "All of the revenue we are receiving from Reebok is being distributed to fighters. Now, I'm sure you guys will be doing calculations and math, trying to figure this out but when you start to look at the number of events and number of fighters, the number being distributed is significant.
"We essentially looked at compensation tiers so that they are based on the distribution of the revenue that is coming through the Reebok contract. The only revenue that is not included and being distributed to fighters will be used to cover direct operating costs of this program."
Per terms of the Reebok deal, UFC athletes are no longer allowed to wear outside sponsorships to the Octagon. Additionally, athletes are not allowed to wear non-Reebok sponsors to fight week-related appearances, such as news conferences.
The UFC has reserved the right to negotiate single-event sponsors, in addition to Reebok, which would allow another sponsor logo to appear on a Reebok uniform. According to Fertitta, the number of single-event sponsors appearing on a UFC uniform will never exceed one.
Revenue generated from these types of sponsors will not be added to the athlete compensation plan, according to Fertitta.
"That's a separate thing," Fertitta said. "We're having a deficit finance for at least two or three years into the millions in this (plan), so we're obviously looking to go out there and raise money to help defray the costs.
"These (compensation tiers) are minimums. We're always going to continue to review this. As I mentioned before, we believe there will be a successful retail launch and we are hopeful there is going to be additional revenue associated with that, but this is what we're able to guarantee at this point."
UFC COO Lawrence Epstein stated that while revenue from single-event sponsorships will not go to athletes, the UFC will encourage sponsors to sign additional agreements with individual fighters.
"As we do go out and potentially procure sponsors that will be on the jersey, one of the things we will ask a sponsor to do is sponsor athletes individually," Epstein said.
As part of the deal, athletes will be eligible to make additional compensation on apparel that is sold bearing his or her likeness. Fighters are also able to keep sponsors outside of UFC-related functions, if able to do so.
Certain athletes have already publicly stated that the impending Reebok deal has cost them sponsorships outside of the cage. UFC president Dana White said the promotion is only now falling in line with what has been standard practice in other professional sports organizations for years.
"It's no different than any other sport," White said. "In other sports, a lot of guys are sponsored by different brands -- outside the NFL or outside the NBA. It's no different. The UFC is just catching up now. There are going to be clothing companies and other sponsors where, if your business is MMA, you're going to want the best guys to represent your brand."