(Disclaimer: Ingrained Media represents Athletes within the sport of Mixed Martial Arts. We have never done business with any of the companies listed below but certain members of our company have. Collectively these individuals made less then $1000 from their previous relationships with these companies. We have no current relationship with these companies.)
Media outlets ranging from The Wall Street Journal to all the top MMA websites have reported on the issuance of arrest warrants for several executives from the online gaming and poker sites such as Pokerstars.com and FullTiltPoker.com and that the government has shut down those URL’s . The Mixed Martial Arts industry claimed “It’s sponsors were shutdown” and one infamous agent said, “In the short-term, it will severely impact fighters’ sponsor revenue, which traditionally matched their show pay for our televised clients. I would venture to say the poker industry is equal to apparel industry as the No. 1 sponsor of fighters outside the UFC.”
We wanted to look into this situation and the billion dollar industry that will be impacted by these bans and the effects, if any, on the sport of MMA and the game of Poker..
A couple things that we need to make sure are clear: This is a US based ban that has a minimal impact on the overall international gaming market, and secondly, this is the US; these executives and companies are innocent until proven guilty.
The sponsors that the Mixed Martial Arts industry have been talking about are actually not the sites that have been taken down. The sponsor of the Mixed Martial Arts industry that is the most prominent is FullTiltPoker.net. The site that has been banned by the US Government is Fulltiltpoker.com. The difference is the .NET site is for entertainment and learning purposes and the .COM is the pay-for-play site. You would think that agent would know who his “number 2” sponsor is. That is, unless he did his deals with FullTiltPoker.com.
It is actually feasible to assume that the Full Tilt corporation will spend more in the US on its .NET presence since that is all they will be allowed to do. Many of the sites that are reporting on this story also earn income from the online gaming industry. I am not sure why or how they could misreport the information.
The Television lineup is still full of various cash poker games and anyone that can go to an Indian Reservation Casino or most of the Casinos in Las Vegas offer both electronic and live cash games. Many states have “poker rooms” that allow cash games and in houses across the US family and friends come together for friendly cash poker games. Poker is a game that dates back to the earliest settlers of this country. Poker is a part of America’s history and future.
Full Tilt Poker is on record saying:
“Dublin Ireland (April 15, 2011) – Full Tilt Poker is saddened by today’s charges against its CEO Raymond Bitar and offers its full support to Mr. Bitar and Nelson Burtnick.
Online poker is a game of skill enjoyed by tens of millions of people in the United States and across the world. And, Full Tilt Poker remains as committed as ever to preserving the rights of those players to play the game they love online.
Mr. Bitar and Full Tilt Poker believe online poker is legal – a position also taken by some of the best legal minds in the United States. Full Tilt Poker is, and has always been committed to preserving the integrity of the game and abiding by the law.
“I am surprised and disappointed by the government’s decision to bring these charges. I look forward to Mr. Burtnick’s and my exoneration”, said Mr. Bitar.
Unfortunately, as a result of this action, Full Tilt Poker has decided that it must suspend “real money” play in the United States until this case is resolved. However, Full Tilt Poker will continue to provide peer-to-peer online poker services outside of the United States.”
We tend to agree with Mr. Bitar’s claims. While we cannot reasonably or responsibly talk about the legal issues these 11 executives are facing, as we said they are innocent until proven guilty. What we do know is that many of the greatest legal minds contend that poker is a game of skill not chance and therefore not technically gambling. I love the game of poker myself. I have played on FullTiltPoker.net and we have a family tradition where we all gather over Thanksgiving and have a Texas Hold Em Tournament.
Online gambling and online poker just got a lot less convenient in the US. The courts are going to be forced to determine if online gambling and poker should be legal and if legal, who regulates the industry.
If you’re in the U.S., when you point your browser to any of those three gambling sites, you see a scary message: The U.S. government has seized the domain names of the three sites, preventing gambling transactions and anything else:
The Government claims that these businesses manipulated the banks in order to process these transactions (almost all of them conducted electronically) using wire transfers, credit cards and other means of commerce.
The problem gets a bit dicey when you realize that these three online gambling organizations are not based in the U.S. For instance, PokerStars’ headquarters is on the Isle of Man, a self-governed British Crown Dependency located in the Irish Sea between Great Britain and Ireland. Here is an image of their headquarters.
Even if the US Government wins the judgement there is no guarantee that the Isle of Man or the other host countries where these business’ operate and are based will comply with the US extradition request or asset seizure request. There is huge disagreement about the legality of online gambling. Not to mention the economic impact these small countries would feel if these large industries ceased to exist.
Are we supposed to believe the banks and credit card companies did not notice billions of dollars of transactions coming and going out of very small countries? Bank of America calls me if I use my card in a store that is outside of my normal shopping habits but they could not detect the billions heading to Ilse of Man or Costa Rica?
Since we are talking about US law and online gambling being illegal in the US, some questions obviously arise. The US Government is for the people, by the people, right? A recent poll of US citizens with over 3100 responses indicates the people are siding with the poker companies. 52% of those asked said online gambling should be legal and that it is a victimless crime, 33% said as long as it was regulated and only 15% said no. So 85% of the people polled feel as if online gambling should be legal and if we were asking them about poker only the percentage would be in the mid to high 90’s.
Last but surely not least, Full Tilt Poker specifically is just a platform. The laws that are being violated if online poker is illegal are being broken by the users of Full Tilt Poker, not the company itself. If the Government prevails in it’s case against Full Tilt and others, are the Internet providers who connect the users responsible? Or how about the poker table manufacturer? Full Tilt is not a wagering company or betting company. They are the virtual version of a Card Room; they merely provide a service to those who wish to test their skills against others for fun, prizes or money. It is duly regulated and licensed by the Alderney Gambling Control Commission.
The residents of the US seem to want to be able to play poker and gamble online and poker seems to be at its all time high in popularity. The few in opposition of the game and its legality should be reminded of Las Vegas. It was a relatively unregulated home to the Mob who handled and profited from the gambling industry. The US Government did not shut down Las Vegas, they cleaned it up and regulated it. The Mob was servicing millions of tourists (the voting public) and the Government found a way to keep them playing. Now Vegas represents a billion dollar industry.
For a company that has always found a way to brand itself (NSFW) in a industry valued in the billions we think the fight has just begun.
Or look at China. Some of Las Vegas’s biggest “whales” came from Asia and specifically China. China took a small island that had historically been plagued with prostitution and some of the lowest numbers trade jobs in the region. It has been transformed to a Chinese Las Vegas. Many of the same casinos located in Las Vegas have locations there. It has become extremely successful and transformed the economy of the region.
The law makers and media do not need to worry about the MMA athletes who are sponsored by websites still operating and very much in need of promotion. We need to ask our Senate and Congress to try to find a way to do what the majority of the people want and legalize poker and online gambling. Virtual gaming will help our economy and could create jobs here in the US if we found a way to embrace rather than erase this business.
We have been blessed to work with some amazing athletes and sponsors over the past few years. They both shared one thing in common, they gain exposure when they perform, and in that performance they have a 50% or greater chance to loose. Throughout this time in the sport of MMA, fighters complain that they do not earn enough and the sponsors claim to not be able to identify the return on investment (ROI) involved.
One of the big issues is that the athletes are usually too busy to market themselves correctly and do not have the right representation helping them find the time and tools to build their own fame outside of the events. The sponsors rarely activate the sponsorship and roll the dice on the event. Yet the athlete they are paying has little to no control over the event, if they show the sponsors logos or the very important walkout. Some brands have paid mid five-figures per fight to have their shirt worn during the walkout and post-fight coverage.
Many opportunities to engage the consumer and potential consumers are often missed or ignored and the activation is almost non-existent. The major promotions like the UFC regulate and restrict which sponsors are allowed and even charge the Brands a sponsorship participation fee. This fees can sometimes be in the mid to high five figures per year. They are not given anything that any other brand is given. You would think that this “tax” would increase the sponsors desire to get more for their investment. Instead it appears to have only reduced the amount the sponsors are willing to pay, made the sponsors focus more on if the event will be televised, and at the same time weeded out the small to medium apparel companies from the mix and removed their ability to support athletes. That is at least what they will have you believe. The fact is, many have just used this “tax” as a reason to leave the sport because they never developed an ROI.
We have brought in many non-endemic sponsors that are focused on the athletes and are willing to look at the events as “bonus” exposure while working with the athlete in a true endorsement fashion. One of the UFC’s major sponsors, Bud Light and it’s parent company, is arguably one of the largest Sports Marketing agencies in the world. They are also one of the most successful.
There is no missing the event involvement Bud Light has in place with the UFC. Their approach to their MMA Fight Team is less about big in-event placement on the athlete and instead more focused on outside the event endorsement. They use their athletes in their retail point of sale advertisements, use the athletes image and likeness in their bar and restaurant advertising, produce webisode series promoting the athletes and more. They make sure they ingrain their brand and athletes at every possible outlet and event. It may be argued that they provide equal or greater promotion of these athletes than the UFC does.
So what are some of the solutions? The first step is for the Brands to realize they are sponsoring and endorsing an athlete. They need to have a plan in place on how they are going to extract value from the sponsorship and utilize these athletes. Instead of looking at it as a billboard type logo placement it must instead be viewed as a relationship. They have to get beyond being a fan of the athlete because that will only lead to the most expensive Facebook photo in the world. Second, they need to activate around the athlete and his or her platform. Use the events these athlete’s participate in as spikes in exposure and capitalize on the ability the events have to engage the target consumer but do not make this the be all, end all effort. The athletes and their team need to make sure they have a platform to offer. The brands need to try to coordinate and cross promote whenever possible.
As you can see Wrangler does a great job with this. They offer a wide array of their shirts with various PRCA and PBR sponsor logos on the shirt along with their Wrangler logo. I know MMA has to get away from having seven competing fight brands on one tee shirt and shorts before they can offer this type of merchandise. As you will see in the slide show below it is not just Rodeo either, many sports employ this model. You are also not tied to using all of the brands as you see with the Wrangler shirt above.
Here is the Official NASCAR Team DuPont Jersey.
And here is a NASCAR fan wearing the same jersey.
Obviously there are no competing brands on this jersey but you see various brands showcased and the primary brand DuPont is prominent. The fans buy these jerseys for the same reason they buy NFL, NBA and MLB apparel because it is authentic looking.
I recently moved to the Central Coast of California and on any given day you see a slew of Cyclists riding through the hills, coast line, and throughout town. I started to notice the majority of them are wearing authentic team apparel. Either Radio Shack has started sponsoring every cyclist in the world or once again we are seeing fans and practitioners of the sport seeking authentic apparel. Here are some examples –
Here is the Team Radio Shack cycling uniform.
Here is the Team using the uniform
And once again here is a fan who has sought, purchased, and is proudly representing the brand in the exact same gear.
This is not really a sport specific phenomenon. The fact is NASCAR, NBA, Soccer, MLB, NFL, PBR, PRCA, Motocross, Indy Car and more derive a considerable amount of revenue from this type of merchandise. The brands exposure is extended beyond the athlete, the event, and the athlete’s platform and the marketing provided by the Brand. The exposure alone is a tangible return on the sponsors investment and having your brand worn by your target consumer or applied to your target consumers personal property becomes an extremely valuable proposition for the brands supporting these athletes and Teams.
The majority of the MMA industry is missing this market and opportunity. From the athletes to the brands no one seems to be making any replica merchandise. There is no doubt that there is a demand for these types of products. There is no doubt that in these tough economic times we need the sponsors to be more successful then ever before and at the same time find a way to extend the engagement beyond the events.
The managers and agents in the sport of MMA need to get out of the patch business and get into the brand building business. They need to build the brands of the athletes they represent and help guide the brands that support those athletes to successful and controllable engagements. If you are merely trading logos for dollars based on exposure you did not create you are on the path to failure for you and your clients.
The athletes need to look for ways to connect with the fans and extract value for the sacrifices made. Depending on events and televised exposure you can not and do not control is a recipe for disaster. You need to yourself or have other people helping you build your brand and increase your exposure even when you are not fighting.
Brock Lesnar’s sponsor Death Clutch has offered replica walk out tees in the past. They seem to be one of the few brands or athletes offering such items. In the past you used to be able to buy the Overeem Replica Fight shorts. The issue with fight shorts is that unless you can kick ass like The Reem you probably should not be wearing his shorts. It is kind of like showing up to your first BJJ class with 20 sponsors on your gi.
Here is the Death Clutch UFC 116 walk out tee:
We have had one client that fought 9 times and 3 of which were in the UFC and he had earned just under $100,000 for 3 years of work and 9 fights that he won, his MMA earnings were predicated on when or if he fought. The same client is now a millionaire based on competing 3 times over two years. He has months where he makes $50,000 and has consistently has earned a monthly income from his endeavors in and out of the Octagon. The difference has been focusing on building his brand and finding ways for his sponsors to earn their ROI. He has both endemic and non-endemic sponsors alike.
The authentic and replica tee shirts are a great opportunity to increase your brand, your sponsors branding, and your income as an athlete. You can go to any size event and you will see merchandise similar to what you see here and in our slide show. If the athletes do not create these then the brands should. Even the video games strive to ingrain authentic sponsors on the in-game characters on both the THQ and EA Sports MMA games.
This should not be ignored and it very well may be the lowest hanging fruit in the entire MMA market. If you trained would you wear replicas of your favorite fighters shorts or rash guard?
I am sure just about everyone in the US has seen that NASCAR fan who has their personal possessions or vehicles with logos from the brands that support their favorite athlete.
Here is a slide show that shows various sport jerseys and tee shirts and the fans that wear them. It is easy to see the potential market that is out there. A lot of these fans are cross over fans and are fans of many sports.
We have seen fight after fight go the the wrong way. The Judges still use old fashioned score cards and need to tally the scores after the fight. This seems like an archaic approach to judging the fastest growing sport.
So it begs to question what is the solution? A lot of times a fighter may feel he is ahead on the score cards and try to fight conservatively in the final round. Could a solution like Rob Dyrdek’s Street League’s real-time scoring be the solution? The fighters know where they stand on the judges score cards as the fight progresses.
What about just using retired fighters or having a “certified” MMA judging program. The program would make sure that judges understood all aspects of Mixed Martial Arts and they all use the same judging criteria. This allows fighters and trainers to know exactly what is going to be scored.
MMA is such a unique sport where winning is a very important part of the sport. Forget about the fair weather nature of the typical MMA fan just take a look at the economics of the sport.
The typical MMA gym charges $80-$150 a month. This fee is merely the entry fee. You will need private lessons that can cost as much as $100 per session. You will need your supplement and meal program, your personal trainer, equipment and likely a standard gym membership to do your strength training These are all up front expenses.
THen you have find the time to train. This can consist of several training sessions a day at various locations. The average MMA athlete trains 4-6 hours a day 4-5 times a week.
All of the above is really just a small part of what it takes to get to the fight you agreed to take. You are only going to be paid if the fight happens. Most promoters pay a “show” and “win” bonus. So loosing a fight based on a bad judges call can affect 50% of the money the athlete earns.
In the NFL or Baseballt he bad calls by referees don’t cost the players 50% of their wages. They are paid to train and compete. MMA Athletes are independent athletes and the judges are costing them more then a win with these bad calls.
After watching the Facebook portion of the UFC’s Fight for the Troops II and specifically the Cody McKenzie vs Yves Edwards fight I was reminded how tough things have become for athletes seeking sponsorships. The big brands are securing the events and the small brands are merely focusing on the TV exposure. The brands remain focused on Ambush Marketing. Athletes like Cody come from Fight Teams that understand the importance of being a marketable fighter. Yet his team failed to take advantage of the fact that millions of potential eyeballs would be watching what would become the fight of the night. The fight could have ended up being a double whammy for sponsors had they sponsored Cody.
I will paste a previous article I wrote about the need for true sponsorships for athletes and the fact that the Athletes must participate in the activation and support the brands efforts. Now more than ever are brands expecting more and able to measure and quantify the results.
To sponsor something is to support it. In our sport (MMA) we are talking about athletes, events, and possibly gyms. Since the down turn of the economy you have seen more and more of the main MMA sponsors disappear or change their sponsorship terms.
What is happening today is brands are calling themselves sponsors to Ambush a particular event. We are hearing more and more that sponsor dollars are tied to TV exposure and if a fighter is not on a televised card there is no money available for him or her. Yet the fighters have no control over televising the fight or not. They control the training, the preparation and of course the execution of the fight,
It takes the average top level cycling team about 8-14 million dollars to have riders qualified enough to place at the top of the biggest races in the World. These sponsors invest in equipment, training, physical wellness, and coaches to help there athletes reach the top. Yet only one rider can win the Yellow Jersey. There is no guarantee that the team they assemble will win, challenge or even make it to the top. It is a risk and the reward could be your Team Winning the Tour De France.
NASCAR Teams usually take on a few exclusive brand sponsors that again agree to pay for tires, testing, best pit crew money can buy, engine and aerodynamic science to go faster and win some races. Being in the top 10 is often a goal because the owners and sponsors know that is who the crowd gets behind and that that where the TV Cameras are going to be. These Teams can cost sponsors upwards of 2-5 million per race and no guarantees of TV time, exposure etc.
I can give example after example but this is combat sports and that means most everything is pay for play. Fighters, trainers, training partners live in a Pay for Play world. If they can reach the biggest stage they can then trade placement on their shorts for money. If they get hurt while training for the “bigger stage” they make nothing. If their opponent gets injured and a fight can’t be rescheduled they make no money. If they end up on the un-televised portion of the biggest stage they make less or no money.
There is no support system for building better fighters. Imagine if NASCAR still used 1970 Monte Carlos and never evolved to the speed rockets they have today. What if Coke told its top racer we will give you 8 million if you win and nothing if you don’t make it on TV.
That is what is going on in MMA. You can’t call yourself a sponsor or a supporter of the sport if you are buying patches on fighters that are televised. To be a true sponsor you have to support the fighters through training, through winning and loosing. It is an investment in the fighter’s future and your brands future. If you are just paying when he or she has a televised fight then are you not just stealing exposure from the promoter? The fighter does not own that television time paying them for it and not the sacrifices made by him, his trainers and training partners is a disservice to the sport.
If you’re a sponsor rep and your trading televised spots for money, are you really doing your client any favors? What happens when all organizations charge a sponsor tax? What about when the sponsors refuse to pay because the promotion decided to bump the fight from televised to dark?
Many fighters show up to fight for the money, the show money and the sponsor money. Then they have to collect AFTER they perform. No credit for the training, no credit for the training injuries and the sacrifices in the gym that helped the fighter reach this spot.
Sponsors are not the problem they are operating in a world created by others. Brand X wants to be affiliated with this fighter because this fighter will be on TV. As Managers, Agents, fighters etc we need to look for ways to give the sponsor more then a patch next to their competitor. We need to develop marketing solutions that include activating the brand into the sport and marketing platforms that allow the sponsor to have exposure points when the fighter is not on SOMEONE’s TV show. The fights and ambush branding should be secondary to the overall campaign.
Developing marketing platforms that involve the fighters and brands. Help the brands reach the fans of the sport and stop relying on the UFC or some other organization to build your fighters name and thus allow you to do more sponsoring dollars.
We have been bringing in over $250,000 a year in sponsorship money as a result we have increased sales for companies and opportunities for fighters. We don’t treat the fighter like a commodity that creates opportunity for us. We work for the fighter and the brand. We help them determine goals and build a program that helps them reach those goals. Marketing in this new economy is about delivering results. If you get a brand on the UFC other agents will call that brand, but have you reached or touched the consumer? Converting sales and reaching a measurable return on investment is what brands want. If sponsor reps really believed that merely putting your logo on the ass of a fighter will spur sales wouldn’t they be putting their companies logo and not Tapouts.
As a fighter invest in yourself and your coaches. Build a brand for you. Only fighters and trainers know how hard they work to get to the fight, I think MMA fighters train harder then any other athlete in the world. The Ultimate Fighter tells you that lots of people are interested in seeing no name fighters train and live the fighter lifestyle on that road to greatness. Don’t wait until some promoter or MMA news site say’s you are great, make yourself great and brand yourself like you are the next Fedror. Act as if.
As a sponsor, get involved with your fighters. Make them a part of your brand. Look at Moto for a great example of how to harness the athletes and fans into a billion dollar industry. You wont see riders wearing Yamaha Jerseys riding a Suzuki. You see brands trying to connect with the consumer they want by supporting and developing the future leaders of the sport. Fighters have no control as to when they will be on TV but if you help build the best fighter in the World you will be on every media outlet you could ever had dreamed for,
Support the Sport and those that make it great. The only guaranteed TV time is to buy a commercial or sponsor the event itself.