UFC Merchandising Agreement - Fighters Get Scammed

[Macedawgg]

Originally Posted by ocfightfan

Well I'm still curious to know where you got this information from. It would be very compelling if you had scans of the documents in question that you could post.

I received copies of the Agreement from multiple sources, both media members and fight managers, each of whom asked that I review it and provide my comments.

I have chosen not to post the Agreement, but check around. Email media members who have written articles, see if the terms are accurate.

[Macedawgg]

Originally Posted by p0id0g

$2 for the photo. $1000 to pay some college kid to design your website and shopping cart. $50/hour for him to maintain it. just some of the tangible costs of doing business in today's world. then there's things like dealing with unhappy customers, lost deliveries, etc. then on top of that you have things like marketing to pay for. who cares if you make $18 per photo if only 1000 people view your website in the course of a month? even at a high conversion rate of 10%, that's only a hundred customers. if you can find the visitor numbers for UFC.com's shopping cart page i can guarantee that it's a much higher number than people who visit, say, joelauzon.com. that's what i meant when i said "a bigger piece of a smaller pie".

An astute comment. I have a suggestion for this exact issue you raise.

[TheJoker]

Originally Posted by FortheLoveofMMA

Billion-Dollar UFC Enters Merchandising in Big Way: Good Deal For Fighters? | The Official Blog of the MMAFA

Marketing Rights Agreement Highlights

· In exchange for granting Zuffa the Merchandise Rights, a fighter is entitled to (i) ten percent (10%) of gross revenue for sales of Licensed Merchandise completed by Zuffa, and (ii) twenty percent (20%) of gross revenue for royalties and/or license payments received from third parties.

· The Agreement grants Zuffa an exclusive license prohibiting even the sale of autographed photographs!

· The Agreement operates to strip even the fighter himself of the opportunity to profit on his own Identity in the marketplace. Not only are fighters being asked to sign an agreement that grants likeness rights to Zuffa on a worldwide, exclusive basis (to the exclusion, incredibly, of even the fighter himself), the term of the Agreement is forever.

· The term of the Agreement lasts forever, and the Marketing Rights for fighter are held by Zuffa even after a fighter is cut!

· The Agreement requires a fighter to make up to Six (6) appearances per year, and each of the appearances may be required of the fighter for no additional compensation.

· The Agreement contains no audit rights which would provide a mechanism for a fighter to enforce the terms of the Agreement and to verify payments are fair.

· The Agreement enables Zuffa to divert royalty and licensing payments by shifting income that could be classified as a license or royalty fee entitling a fighter to payment, into a payment that is Zuffa’s income alone.

· The Agreement requires a fighter to warrant that all permissions have been obtained to utilize third party marks and copyrights.

· The Agreement does not offer any royalty or license payments for video games and DVDs.

· The Agreement prohibits a fighter from not only using Licensed Marks of Zuffa, but also mere words alone!

· The Agreement, in short, is absurd for fighters, and drastically impacts their marketing and revenue producing ability throughout, and even after their athletic careers.


full article here



The full Merchandising Agreement Zuffa is passing sounds largely like an indentured servant contract. When will we, as fans and fighters, no longer tolerate such obvious detriments to our beloved sport?

If anyone has a chance to read this, please do, and let me know your thoughts.

It does do one thing for Zuffa: PROTECT THEM. Have you see what guys on TUF do at times? I believe they should allow CHAMPIONS to be more in control of themselves. NOW, for pay??? LMFAO. I make sure families have food and medical, and get paid fucking NOTHING. MOST people need two and three incomes for one family these days. When Diego Sanzhez receives 70,000 for under 15 minutes of work, I am not sympathetic (for example). Chuck gets 500,000 I believe. Fedor will get 1,000,000 for his fight and Tim will get about 800,000. At about 27,000 a year (BEFORE TAXES), 40 hours a week, paid bi-weekly, for saving people's lives and feeding their children, I have almost NO FUCKING sympathy. NFL, NBA, MLB etc; ALL are over-paid. This world is sick when millions are not enough. They are cutting public assistance funding, putting people on the streets who were feeding others, and some little panzy wants to fucking cry? They make their own choices, and to NOT WORK and get royalties? They are fortunate to get a percentage. I get my job threatened all the time and parts of the US are filing bankruptcy (like a part of California). They get to workout, and beat the shit out of each other, and make more money in 15 minutes (or potentially 25 minutes for a championship fight) than I will make in like 10 years!!!! Grow the fuck up. If they want control, they should join the rest of the world and get a job, and go to work every day, and make tough choices, then watch as government fuck-ups cause people to lose jobs.

I don't agree with the contracts RELATIVE to other sports, but to me, 20,000,000 a year for 5 years (some NBA players for instance) is ludacris. People die and for making the rich MORE RICH, you get paid like that. This is just a small part of this world. NOW, some crying about contracts are little 17 year olds who have NO GRASP of reality YET.

[Macedawgg]

Many people share that exact sentiment, I agree.

Think of it in terms of apples then, and not dollars. People become emotional about dollars. Replace dollars, with apples.

Are the fighters getting their fair share of the apples? And, does this Agreement actually serve to hamper their ability to earn apples with other promotions?

[redjako]

THIS ARTICLE SUCKS!


Where is the ACTUAL agreement, THEN writer could post his points interposed between the legal-ese language. Otherwise, it sounds like a lot of misinterpretation.


And based on the royalties, how is this "not standard"? Does anyone have any related contractual or industry related documents to say otherwise?

Sales reps for companies (retail, whatever, not employees but licensed companies who sell manufactured or wholesale goods) take between 5-15% of the price sold as compensation.

20%...who knows.

Get some real opinions and lets see the ACTUAL agreement before everyone shits on this, this is just MORE revenue for fighters, as well as the promoters.


EDIT: I fail to see the argument of Why you will not post the actual agreement to allow further interpretation of the legal arrangements.

[Macedawgg]

With google, you can find the percentages received by players in all of the other major sports.

Many people have the actual agreement. Confirm with them the quoted sections.

[SSBBrawler]

tsk tsk.

[p0id0g]

Originally Posted by Macedawgg

First, not sure that Zuffa has shown much willingness to renegotiate any agreements. Why would they release a fighter from this agreement, which grants them Marketing Rights forever?

As to the second comment, this is one of the major, major dangers of this Agreement in its current form. The vast majority of fighters will fight in multiple promotions throughout their careers, not only one. As well, even for star fighters, they typically enter a period of "restricted free agency" where they are open to competing bids, and Zuffa can match outside offers. The existence of this Agreement will also directly impact their worth come this "free agency" period, resulting in lower bids.

For the Andy Wang's and the like, why on earth would you want to curtail his ability to fight in other shows and earn money?

why would the UFC let them out of an agreement? let's use a hypothetical example...

let's use diego sanchez. let's say diego signed one of these agreements, and then he went on a killing spree and won 5 fights in a row in devastating fashion and becomes a fan favorite. now because the fans like him and because he's proved his worth when contract time comes around he can say to zuffa "i will only re-sign with the UFC if we can work out new deal for licensing". the UFC comes back and says "we are willing to let you out of your licensing agreement if you take slightly less guaranteed money per fight on your next fight contract". and the negotiations go back and forth. if Diego Sanchez is a hot commidity, he can probably get out of that licensing agreement without giving up much else. if they don't cave in he can look to sign elsewhere that will pay him enough to where he can negotiate a buyout of his licensing agreement. this agreement does not put money into zuffa's pockets once a fighter leaves the UFC, so if someone offered to buy their way out of it, i'm sure they would listen. not ideal, but hey you did sign the contract at one point in time.

and as for the Andy Wang example, we don't know the exact definition of "likeness" that they speak of in the article, but i'm pretty sure it would mean Andy Wang associating himself in any way to his time in the UFC for profit. that's one we can't know for sure without knowing the exact details defined in the actual contract.

I still don't know how a licensing agreement would result in lower bids for a fighter on the market. if anything, it would drive up the asking price for an elite fighter under the agreement because it would take more incentive for a fighter to leave the UFC. but just like the rest of life, the asking price is ultimately determined by supply and demand - as in the supply of fighters at your level and the demand for them by the orgs.

[Macedawgg]

Plausible, though unlikely scenario in my opinion.

In operation, I believe this agreement drastically impacts the abilty of competing promotions, and also the fighter himself, to obtain competitive offers outside of the UFC.

In fact, I believe this concept was in the minds of the parties who drafted this agreement in the first place.

[p0id0g]

Originally Posted by Macedawgg

Another major issue with this Agreement is it imposes no duty on Zuffa to ever utilize a fighter in any product line.

Thus, you could have a fighter tied up with this Agreement, who receives no income whatsoever.

if there is no demand for your likeness, you don't have much to worry about. you are better off training than peddling pictures of yourself at local toughman events.

and if there is a demand, you know for sure that a profit-driven company like zuffa is going to react to that demand.