Mo' money, mo' problems!
At least for Ultimate Fighting Championship (UFC), that is.
The re-signing of top lightweight Gilbert Melendez (details) is a veritable game changer when you consider that Viacom and Bellator were willing to spend so much on a top-tier free agent. Especially on terms that were significantly painful for UFC and not so much for them -- and that UFC was willing to suck it up and make a deal.
Perhaps fighters are starting to carve themselves a much larger piece of the pie?
The terms of the contract (via MMAFighting) are huge:
According to several sources, Melendez's deal guarantees that at least 75 percent of the 31-year-old's fights will be contested on pay-per-view moving forward. Additionally, income earned from Melendez's contracted pay-per-view points will kick in at a lower minimum buy rate than for any contract in UFC history, meaning Melendez will still earn pay-per-view point earnings on an event that performs poorly at the box office.
Melendez will also earn pay-per-view income regardless of his placement on an event, i.e., regardless of whether he fights in the main event, co-main event or main card.
Assuming this was a legitimate, straight-up match, there might be even more to it than just that. Check out what Bellator CEO Bjorn Rebney had to say when he first came to terms with "El Nino."
"I can't be too specific. But it includes on-air opportunities, entertainment opportunities behind-the-scenes, some marketing opportunities, really, the whole genesis is Gil-specific. The key to the deal is building the Gilbert Melendez brand."
Viacom/Bellator got very crafty with its deal. They specifically used language that would cost UFC plenty of money while simultaneously not costing them a whole lot. PPV points kicking in at a lower buy rate? Unless it kicks in at something like 1,000 buys, Bellator wasn't making jack on the PPV scene.
Its first attempt was cancelled when Tito Ortiz got injured and his senior-circuit match against Quinton "Rampage" Jackson was axed. The sales for that event were trending to abysmal and it wasn't going to be garnering more than five-figure buys.
Entertainment opportunities? Meet your new coach on The Ultimate Fighter (TUF). Good for Melendez, but quite frankly, annoying as hell for us as fans. No Jose Aldo vs. Anthony Pettis "super fight" and the featherweight division is now in rematch mode as "Junior's" only legitimate contenders are guys he's already knocked out twice before in Cub Swanson and Chad Mendes.
The 155-pound belt is now stuck in limbo for all of 2014, as well, as these two won't fight until sometime in November or December.
If they fight at all, given the champ's repeatedly wonky knee issues.
All in all, this will make Melendez one of the highest-paid earners in the sport. His disclosed income probably won't change all that much from the near-$200,000 per fight he was getting in the first place, but his PPV cuts ensure he will rake in more than nearly every non-champion in the sport, and certainly more than anyone under 170 pounds.
There are a lot of talking points to cover, so let's plow forward.
This is a huge change in complexion for the industry. For the past three years, since UFC purchased Strikeforce, the leverage for top fighters when it came to negotiating deals was all but gone. You had one place to go if you wanted opportunities for sizable paychecks, top competition, and the big sponsors: Zuffa.
With Bellator/Viacom stalking UFC free agents and hitting them with terms that specifically dent the UFC's bottom line and not theirs, you can expect the next couple of years of fighter negotiations to get really spirited. Competition raises the value of the fighters, as well as their level of compensation.
What's also interesting about this is how it doesn't hurt Bellator all that much in losing its own guys. Alvarez? Just match the exact wording of the contract. What does it matter to them that Eddie's value mostly comes from PPV buys? Just match the terms, despite them not meaning much at all. You've got the lawyers and time.
Don't be too shocked to hear about fighters getting an increase in base pay and a cut in some of those PPV buys and undisclosed bonuses. UFC has to do something to counteract the intelligent lawyering that Viacom/Bellator have accomplished, and simply codifying a stricter payment system has greater significance when it comes down to the courtroom.
All in all, this is a return to the grand years of spending when Strikeforce came in (and Affliction and PRIDE before that) and swooped in to grab Dan Henderson. "Hendo" was coming off his brilliant obliteration of Michael Bisping at UFC 100, the most watched PPV in the history of the sport, and was in talks to rematch Anderson Silva for the middleweight title.
Instead, he took the money and joined the ranks of very well-compensated fighters like Fedor Emelianenko, Alistair Overeem and our man here, Melendez. With the return of bargaining leverage, expect to see plenty of UFC fighters doing a lot of things on FOX, as well as seeing a rise for the mid to top-tier combatants.
Let's talk about Henderson and Emelianenko for a minute.
Remember how much they made that night? Fedor alone made more than double the paltry gate, and "Hendo" got the biggest (disclosed) payday of his career. Don't be taken aback if we return to those heady days when clothing companies were risking it all just to sign the biggest names and go toe-to-toe with UFC.
Also don't be too surprised to see more of these guys cut if they hit a losing streak. They're not going to keep around a loser for that much money.
Bjorn Rebney (via MMA Fighting) had this to say in regards to the Melendez re-signing:
"It's my understanding that UFC matched the deal we agreed to with Gilbert. While I haven't yet spoken to Gilbert's management team, I have heard from various sources that UFC matched our offer. We have a stacked lightweight roster and Gil would have made a great addition to it, yet I'm glad he was able to go out, explore the free agent market and get paid what he deserves. That's what the free market system is all about. I'm happy for Gil, that through this process he was able to ensure long term financial security for himself and his family. That's what the fighters that put it all on the line inside the cage deserve."
"This process has shown that in MMA, there are two legitimate options for fighters. And, as I said last week, with two large scale options for fighters in MMA, fighters negotiating power is dramatically improved. Our actions throughout this process accomplished that for Gilbert right now, and in the future it will do the same for countless additional fighters. Some will end up in Bellator and some will end up in the UFC. But, either way, the sport benefits. Now our focus turns to the task at hand, which is our Season 10 kickoff this Friday on Spike TV."
While we, as fans, are going to bemoan the lack of a unified talent pool and foul-ups when it comes to getting the matches we want to see, this is a big change in the favor of the fighters when it comes down to actually using this sport to be set for life.