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I would give them the "Werdum" treatment.
Dana's mistake is not cutting them, that is a business decision. It's how he did it.
He should handle guys like he handled Werdum initially. After Werdum got KTFO by JDS, the UFC offered Werdum a substantial paycut to stay with the UFC. Werdum refused so they parted ways.
They should have done that with Fitch and Okami. Offer them new contracts at 50% paycut. If they say yes, cool. If they say no, then you part ways because you couldn't agree on financial terms. It's way cleaner than simply cutting them, because in a way it was partially their choice. You can say you wanted to keep them, but you couldn't come to a financial agreement. That happens all the time in all sports.
I don't see why the UFC seems to keep an all or nothing approach lately. At least offer less money to keep them, it can't hurt.
Your way is pretty smooth, but I'm not certain the UFC was trying to avoid controversy.
I think White wanted to make a point with these guys, just like I think he tried to make a point by keeping Garcia around so ridiculously long. They are trying to create an incentive to fight aggressively and with the finish in mind even at the cost of losing.