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Tuesday, 05/14/2013, 09:39 am

A look inside a UFC fighter’s contract

The Ultimate Fighting Championship is usually quiet about their contract negotiations. Bleacher Report sat down with UFC owner Lorenzo Fertitta, president Dana White and general counsel Lawrence Epstein and discussed the contract that Zuffa has with it’s fighters.

“People want to compare us to other sports, and in some sense that’s fair to do,” Fertitta told Bleacher Report. “There are a number of things that are unique to our business…”

Fertitta went on to say that they are in charge of all production and marketing costs for their events, unlike the NFL or boxing. The NFL gets a license fee from Fox and boxing gets a licensing fee from HBO. He said that those media entities do the marketing and operate the production for those sports. The UFC televises their entire cards where over a thousand people get paychecks.

“It’s a massive, massive undertaking,” he told Bleacher Report.

The amount of money that UFC fighters actually get paid is usually kept secret. Some state athletic commissions are required by law to report fighters’ base pay, but some of their bonuses are not included in the mandatory reporting.

“We don’t give out numbers,” White told Bleacher Report. “We don’t say how much fighters get paid or what the company is making. It’s something that we don’t do and it drives people crazy.”

Here are some of the points that they have discussed about the contract every fighter has to sign to gain entry to the UFC with Bleacher Report:

Article I Grant of Promotional Rights: The Fighter hereby grants to ZUFFA the exclusive unrestricted worldwide right to secure, promote, arrange and present any and all mixed martial arts contests (individually, a “Bout” and collectively, the “Bouts”) to be engaged in by Fighter during the Term (as defined herein) and any Extension Term (as defined herein), including all rights to stage each Bout and to sell tickets of admission thereto (the “Promotional Rights”) and to exploit the Ancillary Rights (as defined herein) to each Bout in all media, now known or hereafter devised throughout the world in perpetuity.

“You’re not going to put an event on television and, five years down the road, not have the rights to show that somewhere. You have to have those rights. It’s no different than a movie or anything else,” Fertitta said.

“We’re trying to capture the rights that can emanate from the fighter’s participation in our event. The video that we capture of the pre-event, the post-event, the event itself—we want to be able to exploit that in any way we possibly can. At the end of the day, that’s the only real asset that the UFC has,” Epstein said.

Article VI: Fighter’s Purse: c. If and only if Fighter is declared the winner of the first Bout and the second Bout by the applicable Athletic Commission, Fighter’s Purse for the third Bout shall be Eighty Thousand Dollars (US $80,000.00), less all permissible or required deductions. If and only if Fighter is declared the winner of the first Bout, the second Bout, and the third Bout by the applicable Athletic Commission, the Win Bonus for the third Bout shall be Eighty Thousand Dollars (US $80,000.00), less all permissible or required deductions. If Fighter is not declared the winner of the first Bout and the second Bout by the applicable Athletic Commission (and if there is no Acceleration), Fighter’s Purse and Win Bonus for the third Bout shall be the same as set forth in subsection (a) above. If Fighter is declared the winner of either the first Bout or the second Bout by the applicable Athletic Commission, but not both (and if there is no Acceleration) Fighter’s Purse and Win Bonus for the third Bout shall be as set forth in subsection (b) above.

d. If and only if Fighter is declared the winner of the first Bout, second Bout and third Bout by the applicable Athletic Commission, Fighter’s Purse for the fourth Bout shall be Eighty-Five Thousand Dollars (US $85,000.00), less all permissible or required deductions. If and only if Fighter is declared the winner of the first Bout, the second Bout, the third Bout, and the fourth Bout by the applicable Athletic Commission, the Win Bonus for the fourth Bout shall be Eighty-Five Thousand Dollars (US $85,000.00), less all permissible or required deductions. If Fighter is not declared the winner of the first Bout, second Bout and third Bout (and if there is no Acceleration), Fighter’s Purse and Win Bonus for the fourth Bout shall be as set forth in subsection (a) above. If Fighter is declared the winner of only one of the first three Bouts by the applicable Athletic Commission (and if there is no Acceleration) Fighter’s Purse and Win Bonus for the fourth Bout shall be as set forth in subsection (b) above. If Fighter is declared the winner of only two of the first three Bouts by the applicable Athletic Commission (and if there is no Acceleration) Fighter’s Purse and Win Bonus for the fourth Bout shall be as set forth in subsection (c) above.

“Our structure is different in that it’s not just one guy on the card that’s making that kind of money. We’re paying significant dollars for the main event (and) the opponent. The co-main event (and) the opponent. Guys who are headlining on the pay-per-view and guys who have to be the main event on the prelim show on FX…the wealth is spread a lot more evenly than it is in boxing, where one guy garners more than his fair share, or the entire share,” Fertitta said.

Article VI: PPV Bonus: 6.2   ZUFFA and Fighter intend for Fighter’s first Bout, under this Agreement, to be for the UFC lightweight title and for said lightweight title Bout to occur before the end of March of 2013 so long as Fighter and the then current UFC lightweight champion is medically and/or otherwise able to compete by such date. For the avoidance of doubt, however, regardless of whether Fighter’s first Bout is for the lightweight title Bout and occurs on or before the end of March of2013, in addition to the Fighter’s Purse, (i) for Fighter’s first Bout under this Agreement; and (ii) for any subsequent Bout thereafter in which Fighter participates in a Bout and is defending a UFC Championship belt, so long as such applicable UFC event is broadly distributed in the United States and/or Canada, or any other territory, including via the internet, and so long as the rates charged in said territories, or on the internet, are comparable to those charged in the United States or Canada, on residential pay-per-view on iN DEMAND, DirecTV, Echostar, or similar pay-per-view provider as utilized by ZUFFA (“Pay-Per-View Providers”), then Fighter has the potential to receive a pay-per-view bonus. If such UFC event exceeds specified buy rates of combined sales through Pay-Per-View Providers, Fighter shall receive a Pay-Per- View Bonus as follows:

For combined Pay-Per-View Provider buys purchased within thirty (30) days of the live event, Fighter shall receive One dollar ($1.00) for each pay-per-view buy between 200,000 buys and 400,000 buys; and Two dollars ($2.00) for each pay-per-view buy between 400,000 buys and 600,000 buys; and Two dollars and Fifty Cents ($2.50) for each pay-per-view buy over 600,000 buys.

“The way we’ve structured the compensation is fair. Our top guys simply eat what they kill. Which means they get a back end on the pay-per-view. And for guys we think perform and do a great job, we then sit down and we hand out a significant amount of discretionary bonuses,” Fertitta said.

Article XII: Right to Match: 12.1 During the one (1) year period after conclusion of the Term for any reason whatsoever (the “Matching Period“), ZUFFA shall have the option to match the financial terms and conditions of any offer made to Fighter for an Other Bout as defined in Section 3.6 of this Agreement. Fighter shall not accept any offer or enter into a contract or agreement with any other promotional entity during the Matching Period without complying with this Section 12.1. Prior to acceptance of any Offer made during
the Matching Period, Fighter shall first deliver to ZUFFA a written notice of all material financial terms and conditions of the offer, including, but not limited to, the identity of the promotional entity making the offer. Such notice shall constitute an exclusive, irrevocable offer (the “Fighter Offer“) to contract with ZUFFA on the same financial terms and conditions. ZUFFA shall have fifteen (15) business days following receipt of the Fighter Offer in which to accept the financial terms of the Fighter Offer. If ZUFFA does not accept the Fighter Offer, Fighter may then accept the offer without modification during the ten (10) business day period following expiration of the Fighter Offer (the “Contract Period“). If the offer is modified in any material way, such modification shall give rise to another Fighter Offer on such modified terms and conditions and ZUFFA shall have the option to match the terms of the offer, as modified in accordance with the terms and conditions of this Section 12.1. If Fighter has not contracted with a third party on or before the conclusion of the Contract Period, then all rights granted to ZUFFA pursuant to this Section 12.1 shall be automatically reinstated.

“Everybody needs more money. Everyone wants to make more money…Every day a new guy’s contract is up and we bring him in, we sit down and negotiate and our goal is to have that guy walk out that door happy. We want the people here to be happy. You can’t make everybody happy all the time. You saw what happened with Rampage. Rampage made it very clear he wasn’t happy here in the UFC. OK,” White said.

 

 

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