UFC’s sponsorship deal with Reebok about more than a new look

At the end of a news conference in New York on Tuesday to unveil the uniforms UFC fighters will wear beginning July 11, Corrina Werkle, the general manager of Reebok's training business unit, wrapped it up by giving a summary.

The kits are all about flexibility, strength, customization and fit, she said. They will transform the UFC, she noted, and elevate the sport of mixed martial arts forever.

Ignoring, for a moment, Werkle's overreaching, self-serving statements, the truth of it is that it is all about money – television money, to be exact.

That's not necessarily a bad thing, but it is the truth. This deal was done, quite simply, to provide a better look for television so that the product is more appealing to TV networks when the UFC's current deal with Fox expires in 2018.

The best-case scenario for the UFC would be for Fox to bid for its rights against a competing network, such as ESPN.

Nobody can argue the wisdom of that move, and the long-range consequences it could have for the athletes. In making the decision to eliminate all logos but Reebok's from fighter gear during UFC events, however, it dramatically impacts the fighters.

The UFC earlier this year announced it would use seniority in order to determine the sponsorship payouts. Beginning at UFC 189 on July 11, there will be no more Dynamic Fastener or the like on fighter clothing. It will be all Reebok and all shockingly similar.

Champions will make $40,000 per fight for wearing Reebok, while title challengers will get $30,000. Fighters with five or fewer bouts in a Zuffa-owned promotion will make $2,500, while those with 21 or more such fights will get $20,000. This is all in addition to their pay.

Many fighters, notably heavyweight Brendan Schaub, have said they will lose money on the deal. Schaub said he was making $100,000 in sponsorship money per fight, which UFC president Dana White out-and-out mocked as untrue.

Under the terms of the Reebok deal, Schaub will make $10,000 per fight because he has 11 UFC fights.

Lightweight Joe Lauzon, who has 18 UFC fights, told Yahoo Sports he averaged about $24,000 in sponsorship deals per fight over his last eight fights.

He'll make $15,000 for his July 25 fight against Takanori Gomi and then for the fight after that. Then, he moves into the 21-and-above tier in which he'll make $20,000.

"I don't have to pay a manager [a commission], I don't have to worry about the banner, I don't have to chase the money, any of that stuff," he said. "What am I going to lose, a couple thousand bucks, and I know for sure the money is going to be there and I don't have to try to track it down and I can focus fully on training? Hey, sign me up. That's a great deal for me."

Fighters are allowed to keep their current sponsors, but they can't wear them during any UFC fight-related appearance. So while featherweight champion Jose Aldo has kept Venum, an apparel company, as his primary sponsor, at UFC 189 and all appearances during fight week, he and his team will be in Reebok gear.

But most fighters will likely lose their sponsors because the athletes aren't well known enough to be of use if the sponsors’ logos can't appear on television during UFC broadcasts.

This is change, and change is always painful. Though it has been moving in this direction for a long time, this is the official end of an era in which the UFC would allow its athletes to take advantage of its brand to make some extra money.

White and his partners, brothers Frank and Lorenzo Fertitta, bought the UFC from Semaphore Entertainment Group in 2001 for $2 million. Even at that bargain basement price, it was a losing proposition.

Not many people even knew that it existed, and those who knew largely didn't care. Only four years in, Zuffa was $44 million in debt and exploring a sale.

In those days, a major brand like Reebok wouldn't even have taken a call from a UFC executive. As a result, White and the Fertittas made a deal with their fighters to pursue outside income.

"When we considered going this route, we did a lot of work and a lot of research because we understood this was going to be a seismic change in the industry," Lorenzo Fertitta, the company's CEO, told Yahoo Sports during an interview in his Las Vegas office. "When we first bought the company, it's kind of interesting, but there weren't a lot of sponsors because the business wasn't very attractive.

"We were so focused on just building a sustainable business model at the time that fighter sponsorships never really became a part of the conversation."

So UFC management told the fighters in essence, we can't pay you a lot of money right now, but go out and get what you can get in sponsorships and we'll do what we're able to help you facilitate that.

"We said, 'It may not always be this way, but this is where we are right now,' " Fertitta said. "But the business has evolved light years in the last 15 years and we started to take a look at, quote-unquote, 'Is there a way to make the sport, and make our show, the brand, look more professional?'

"We felt like the logo soup that existed within the show brought down the value for everybody."

The logo soup is now officially gone, though the uniforms Reebok displayed on Tuesday were quite underwhelming (and littered with mistakes).

Given that the logos that once were so common on fighter shorts will no longer be able to appear on the UFC's broadcast, many of the companies that have been paying UFC fighters sponsorship dollars are walking away completely or cutting back on the amount they spend.

There are many good aspects of the Reebok deal for the fighters, but this is one of the bad ones.

And while Fertitta said it is no different than what is happening in the NFL, where Nike is the equipment supplier and players have individual deals with adidas and Under Armour, among others, MMA fighters have nowhere near the visibility of an NFL player and aren't in that kind of demand.

"Sure, Dana says, 'Yeah, you can do whatever you want and you can keep your sponsors,' " said Oren Hodak, a fighter manager with KO Reps who has done excellent work with fighter marketing and sponsorship deals. "My sponsors, and the majority of the sponsors, they want TV visibility. They want impressions.

"A lot of these companies, with no more logo placement, they're not going to spend the same amount they used to."

Still, Hodak isn't completely sour on the deal and says he understands the UFC's rationale for it.

He thinks some managers may take a more serious look at placing their fighters with Bellator, generally regarded as the industry's No. 2 promotion, because of the deal. He's not necessarily prepared to go that route, though.

The UFC's performance bonus structure plays a big role in that thinking, he said. It gives out four $50,000 bonuses for each card. Two of them go to the participants in what is judged Fight of the Night, while the other two are referred to as Performance of the Night bonuses.

The UFC also pays discretionary bonuses in addition to the fighter's contracted pay. All of that, Hodak said, makes a significant difference.

"I still think the UFC is the place to be," Hodak said. "If you're on the verge of signing with either the UFC or Bellator, I still think the UFC provides the most opportunity, even with the uniform. A $50,000 bonus is a life changer for a guy making 10 and 10 [$10,000 to appear and $10,000 for a win]. Even if you're at 20 and 20 and you win your fight, if you get one of those bonuses, that's a significant amount of money. You're more than doubling your salary. You can't ignore that."

There is one other source of income for the fighters in this deal: the sale of their branded merchandise. There are two separate kits that Reebok will sell. One is the fight kit, which is the apparel the fighters will wear on fight night. That is something that a weekend warrior may wear to the gym.

That gear is not only prohibitively expensive – fighter kit jerseys are $70 to $80 – but it's not particularly attractive. There is also fan kit merchandise, which is cheaper and has different logos that are more individual.

Lauzon said he hasn't had a chance to work with the fighter kit and hasn't communicated with Reebok about what his fight outfit will be like.

"I think it's going to be interesting to see how this plays out, because I don't think the Day 1 stuff is the stuff that everyone is going to be super proud of," he said. "But it's going to be the stuff in six months or a year when it will make a lot more sense. This is the beginning and it's kind of like baby steps. I don't know what we have for gear customization options.

"I saw my shirt [on the online store]. They have a Joe Lauzon shirt. I didn't pick the color. I didn't pick the design. … From a logistic standpoint, it makes sense to keep things kind of basic in the beginning because there is less chance for screw-ups. Give us a couple of color options and in six months, a year, when they have the system down better, then we can have the chance to personalize and customize more."

Popular fighters like Conor McGregor, Ronda Rousey and Cain Velasquez won't have trouble selling merchandise and will get royalty checks from the sale of their branded gear. The same gear will be available for all 500-plus fighters, but it's unlikely the vast majority of them will make anything significant from it.

That's not different than normal. Fans buy gear of the biggest stars in disproportionate numbers than the rest, no matter the sport.

The best selling NBA jerseys in 2014 were those of LeBron James, Kevin Durant and Kobe Bryant. The best selling NFL jerseys from April 1, 2013, through Feb. 1, 2014, were those of Russell Wilson, Peyton Manning, Colin Kaepernick and Tom Brady. In the NHL, it was Patrick Kane, Sidney Crosby and Jonathan Toews.

So it should come as no shock that Rousey and McGregor may sell more shirts in a day than, say, Joby Sanchez may in an entire year.

Apple is the world's richest company and has employees who make eight-figure salaries. But the kid who sold you your last iPhone or iPad at one of its retail stores isn't making much more than minimum wage.

That's business and that's the free market.

But the UFC must commit to raising fighter pay if the Reebok deal has the desired impact and results in significantly better terms on the next TV deal.

As it stands, it seems it's going to be better for some fighters, worse for others and about the same for the majority.

Fertitta said the response the company has gotten from media companies "has been overwhelmingly positive." And if that leads to a better TV rights deal, then this ultimately could work out in the fighters' favor.