Fight Capital Newsletter #13

Welcome back to the (lucky) number 13th edition of Fight Capital! Though there won't be any podcasts this week, I'm eagerly preparing new content and conversation with promoters, coaches, athletes, and agencies to be released soon.

For this week's article, I tackled an issue of personal significance: the transformative power of sponsorships in combat sports.

Much more than mere marketing, these sponsorships represent financial lifelines for fighters and play a critical role in defining their careers and the evolution of the sports themselves.

I invite you to join me on this journey as we delve deeper into the seldom-discussed intricacies that mold the landscape of combat sports.

Importance of Sponsorships for Combat Sports Athletes

A casual fan of combat sports may see sponsorship deals as logos and background scenery that doesn't concern them, but these deals can be instrumental for the fighters and the companies that sponsor them.?

The global sports sponsorship market size is expected to grow from $60.09 billion in 2022 to $63.74 billion in 2023 at a compound annual growth rate (CAGR) of 6.1% ("Sports Sponsorship Global Market Report 2023," The Business Research Company).

Sponsorships are a primary source of revenue for all kinds of combat athletes, whether in Boxing, MMA, Brazilian Ju Jitsu, or Kickboxing, and it's rarely spoken about outside the combat sports community.

Today I will talk about the importance of these deals and how they impact the fighters' lives.?

Evolution of Sponsorship in Combat Sports

Sponsorships in combat sports have undergone significant changes in recent years. Traditionally, only elite athletes could secure lucrative deals, with major sports brands seeking popular athletes for widespread brand visibility.

However, as these sports have gained mainstream popularity, athletes, even at the early stages of their careers, are attracting sponsorships, reflecting the evolution and democratization of this business model.

Proof in the pudding: In 2022, the Ultimate Fighting Championship saw its "best sponsorship year ever," according to Endeavor , while growing its fan base by double digits over 2021 in the U.S.

There's also been a shift in the type of brands investing in combat sports. From traditional sports brands like 耐克 and Reebok , we now see a diverse portfolio, including tech companies, energy drink brands, and cryptocurrency platforms.

Sponsorship deals have evolved from logos on gear to integrated marketing strategies involving social media campaigns and athlete-endorsed merchandise.?A recent example is the "Suga" Sean O'Malley content and sponsorship collaboration with Timex Group .

This change underscores the growing importance of sponsorships as a revenue stream for a broader range of combat sports athletes.

A Financial Lifeline for Athletes

Sponsorship deals are essential for fighters to thrive in combat sports. However, only some fighters can get the kind of sponsors that can help them change their lives.

Competing in combat sports requires much training and demands athletes to maintain an expensive lifestyle. Fighters must pay for their coaches, managers, costly supplements, and diet plans and give much time to their training.??

A typical fight camp ranges typically between six to eight weeks. For major fights and championships, camps can extend up to 16 weeks.

An extreme example of this: As Islam Makhachev entered the octagon to face Charles Oliveira for the lightweight title at UFC 280, the commentators highlighted the rarity of his situation. On average, MMA fighter almost rarely makes $1 million per fight. Yet, the legendary Khabib Nurmagomedov had invested $1 million into Makhachev's single training camp to prepare for that championship bout.

This is often to the point that there is a stressful situation holding down other jobs to support themselves. Becoming a combat athlete requires many sacrifices, and sponsorships, especially in the early career of a fighter, can be like a lifeline.?

In 2021 in an interview with Fight Nation, former UFC bantamweight champion Miesha Tate revealed that her $200,000 payout from her comeback fight at UFC Vegas 31 was significantly reduced after factoring in taxes and expenses, leaving her with around $4,000, a 98% expense. Despite also earning a $50,000 "Performance of the Night" bonus, Tate highlighted the high costs of preparation, including organic food, training gear, travel for coaching and training, and supplements.

Every dollar counts.

The Most Significant Sponsorships in Combat Sports

The highest-paying sponsorship deals in combat sports are usually reserved for elite athletes. Popularity and fanbase also play a significant role in determining a fighter's eligibility for sponsorships. Naturally, boxers and MMA fighters make the most from sponsorship deals since these sports are much more popular than others.?According to Forbes :

• Conor McGregor has made upwards of $10 million from sponsorships in recent years. He has dealt with major name brands like Monster Energy , Burger King , Beats by Dre , and 美国艺电公司 Sports.
• In Boxing, fighters like Anthony Joshua have made over $53 million from sponsorships in a year with brands like Audemars Piguet , DAZN , and Under Armour . At the same time, Canelo Alveraz makes over $10 Million with brands like Tecate, Everlast Worldwide , Hennessy , and DOLCE&GABBANA .?
• Jiu Jitsu Athlete and ADCC champion Gordon Ryan signed a $100,000 deal with Bitcoin Cash and have multiple other sponsorship deals with the Joe Rogan Experience and Future Kimonos .?

Sponsorships in MMA vs. Boxing

It is common for high-profile boxers to make more money than MMA fighters, and one of the main reasons behind it is that boxers aren't tied to a single organization like the Ultimate Fighting Championship and, therefore, can make much more lucrative sponsorship deals.?

It is common for popular boxers to make more money from their sponsors than their actual fight purse.?

On the other hand, the UFC does not allow its fighters to wear sponsorships on their kits; however, for the most part, fighters can acquire sponsorship deals outside the UFCs events and media coverage.?

Other leagues like Professional Fighters League , Bellator MMA , and ONE don't enact the same restrictions, but UFC fighters make more on average.

Some fighters can promote their brands during UFC media events if they are distinct from any of the UFC's sponsorships. For instance, at UFC 291, Dustin Poirier recently placed his hot sauce brand bottles, Poiriers Lousiana Style, made in partnership with Heartbeat Hot Sauce Co , on stage during the press conference.

Mainstreaming into the Future

As combat sports gain increasing mainstream recognition and their fan base expands, the stakes and opportunities for sponsorship deals rise exponentially.

This evolving landscape amplifies the influence of sponsorships, making them critical determinants of an athlete's career trajectory – from their financial stability and ability to focus on training to their brand image and global reach.

Moreover, these partnerships financially underpin the athletes and their endeavors and actively mold the industry's future. They do this by dictating marketing trends, shaping audience perceptions, and even influencing how the sport evolves, given the significant monetary investments and promotional strategies they bring to the table.

As we look ahead, this symbiotic relationship between combat sports athletes and sponsorships is expected to deepen, with each shaping the path and possibilities of the other.

HOW AM I DOING?

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