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I think the reason it is a mistake is that the UFC so greatly undervalued the advertising space of their fighter's uniforms and corners, etc. If a fighter is pulling down 60K from his sponsors, but the UFC is only making a third of that from Reebok, then they made a mistake. The UFC and the fighters both would have made more money had the UFC continued to allow the fighters to handle their own sponsors and taken 40% of what the sponsors paid. To me it is a msitake when a 22 year old muy thai fighter without a degree can extract more money from advertisers than a multi-billion dollar company can.
The screwjob is that it ends up greatly undercutting effective fighter pay. It's the UFC's right to do so, but it certainly screws the fighters to b e very suddenly maken half or less of what they used to per fight.
My position on it undercutting fighter pay is that I never considered it reasonable to allow fighters access to promote products on the UFC platform. I understand how in the beginning Zuffa struggled to stay alive, and the practice made positions on a UFC card more attractive at a lower cost. However, I think there was a negative effect on the UFC's position allowing unregulated banner and clothing advertising on their events.
I'm not going to feign any certainty on the UFC's ability to market. They tried allowing fighters to bring their own sponsors to the table, giving Zuffa a cut, and determined it wasn't how they wanted to go. It's entirely possible they're making less money with Reebok, I have no idea. Maybe they're making ten times as much on the Reebok deal as they're admitting. I don't think these numbers are public.
As a fight fan, it diminishes events for me when the fighters are walking billboards. I think they should be allowed to wear whatever legal gear they want and I think the idea of uniforms is pretty weak, but I always hated the mad scramble for caps and banners.
I am pretty certain that if the UFC had chosen to use the model the fighters were using they would have made exponentially more than the fighters are able to generate. When the Reebok deal went into effect, there were interviews with major sponsors now cut off who said it was crazy how little they had been paying the fighters to promote their brands on major broadcasts. I'm confident the UFC would have done better.
For whatever reason they chose to homogenize the product and stick to a single sponsor for gear. I don't think the bottom line was their primary motivation.