UFC: More clothing deals to come

USA TODAY spoke to Fertitta and Johnston this week about how UFC's apparel business works with fighters. Excerpts from the conversation:

USA TODAY: I gather UFC believes "sponsorship" is the wrong term for what's going on with Jon Jones. Is it inaccurate?

BRYAN JOHNSTON: Yes, it's inaccurate because you've got to remember that their organization has got over 350 fighters in it.

So if you start at the very basic level, our job is to support the fighters. At the fighter summit, we probably gave out a quarter of a million dollars in product. Every single fighter – whether they were a new fighter entering the organization or a fighter like Jon Jones – got the exact same product offering. So it starts with lifestyle product (and) training product, things that they need specifically in the gym.

It's no different than the mindset that you have working at Nike or Adidas or Under Armour, where you use the athletes that are within your world to help you develop world-class products for that specific sport.

LORENZO FERTITTA: At the end of the day, this is not your traditional fight-promotion company. What we've really built here is a completely different animal.

Yeah, we put fights on, but we're a global media/lifestyle company. As part of that, we've been able to create a number of different business silos, whether it be on the videogaming side; on the licensing side with different products; on the DVD side; digital downloads.

And this is another silo which is, we've developed a lifestyle clothing brand, in addition to a performance line of clothing that's used for training. The people that are responsible for running that department understand that the way they're going to be able to hit their sales quotas is that the general consumer, the general public needs to be exposed to the product.

How you do that is, you get the product on the athletes. No different than (how) TapouT wants to do that, and MMAElite and Jaco and all these other guys.

The Jon Jones thing, it's really kind baffling to me that people have kind of responded the way they have. I guess because people don't really understand how it came about.

To give you a little bit of background, I was going through the process of renegotiating with Jon and his management team on his fight contract. One of the things they brought up was that Jon was at a point where he didn't necessarily want to sign contracts with some of these smaller, what I'll call, T-shirt companies that you historically see in UFC, whether it be Tapout or MMA Elite or any of these other guys.

His aspirations (were) that he wanted to be signed by a Nike or an Adidas or an Under Armour, somebody like that. The reality is, those opportunities don't present themselves to Jon right now, and that's why I suggested, "Hey look, we've got this performance line of gear. Let us send it to you. You can test it. You can try it out. If you like it, then you can wear it in your next couple of fights."

In addition to that, it's nonexclusive. (He) can still go out and get a deal with Nike, Under Armour, Reebok or Adidas. So it's a very open-ended process as far as him wearing that.

And there's been other guys that have worn UFC-branded product to fight in as well. So it's not necessarily the first time.

BRYAN JOHNSTON: We tried to actually do a quick count of how many times fighters have worn UFC gear, and we can't even count it. But it's in excess of 20. If you go to UFC's (website) and you look at the apparel part of the website, you'll see Phil Davis, Urijah Faber, Clay Guida – I can't even give you the list of fighters that are all wearing the performance gear and all wearing the lifestyle gear.

I think the issue that we have and that we're dealing with in a weird way is a very uneducated media audience as well as a fanbase that's not really looking at this from a way that an Adidas, a Nike or an Under Armour would.

My background was with Burton Snowboards. Just to be really clear, Burton Snowboards owns and operates five of the largest snowboard events in the world: the U.S. Open, Canadian Open, European Open, Australian Open, the Asian Open. Not only do we own the event, we actually own the judging. ... This concept (of not having specific athletes endorse an event organizer's clothing) has never even come up in that world of sports.

You take surfing; Kelly Slater, 10-time world champion. The Quicksilver Pro is one of the biggest events in the world. So should Quicksilver stop sponsoring Kelly Slater – not even sponsoring, but having Kelly involved in product development – because they own a surfing event? Probably not.

You want to go into Under Armour. Under Armour probably has 25 percent of the high-school football programs in the country. They've probably got 25 percent of the college-football programs in the country. They also have the NFL combines and the college combines. Should they get out of the combine business?

It's really a baffling (idea).

LORENZO FERTITTA: Yeah. I was actually surprised that people were concerned with this. But whatever.

USA TODAY: The perception or suggestion on the part of some folks is that because only one fighter is wearing your gear in the cage, he is being favored over the other in the fight. Why is that not true?

LORENZO FERTITTA: Well, first of all, I don't know what we could possibly do to favor him. Anything relative to the fight or the outcome of the fight is 100 percent completely out of our control.

The fact of the matter is, Rashad has a deal with Jaco. I don't know the express terms of it, but it's probably a very good deal. That's who he chose to sign a deal with. He's not available to even wear any UFC-branded gear in a fight because he's already got a pre-existing deal.

So I don't know how anybody can come to the conclusion that one fighter is being favored over the other.

Jon was out of contract. He didn't have a deal, and he didn't want to sign another deal with one of those typical MMA brands and decided that he wanted to wear UFC gear.

BRYAN JOHNSTON: The general frustration, if you talk to our fighters, is that no one is making a performance line specifically for a mixed martial artist and a mixed martial arts fighter.

Everything that they're adopting from either Nike, Adidas or Under Armour, it's built for other players in other sports. So the fit's not right. The things that they need to train in is not built specifically for what they do every day.

So when Lorenzo hired me – this goes back three-and-a-half years ago – probably one of the very first things we did was, we got Gray Maynard in here. Because Gray Maynard was close by, had a great background, had a great relationship with the guys in our gym.

Again, no different than Nike, Adidas or Under Armour. We brought Gray Maynard into the fold and really started using him to start helping us develop the first product.

This is the way things work in a sporting-goods business.

USA TODAY: When the athletes wear this performance gear or lifestyle apparel into the cage, are they compensated extra for that, or is it built into their fight contracts?

Fertitta: It depends. Every contract's different.

There's different incentives that are built into fight contracts. There's different modes of compensation. In some cases guys wear the gear as part of their fight contract, and in some cases they're compensated above and beyond that.

USA TODAY: If Rashad was not under contract to another apparel manufacturer, would he be a guy you'd want wearing your gear?

Fertitta: Certainly. Listen, we'd love to have as many guys that want to wear gear.

Of course, Rashad would (be someone we'd want). You're talking about two of the highest level, most exposed fighters that we have on our roster. Of course, Rashad would be.

BRYAN JOHNSTON: Then again, if you go to the UFC website, not only did Rashad get involved in the early development of product, there's photos of him on our website in the compression gear, in the training gear.

He was one of the main guys that we used to develop sizing. In the Nike/Adidas/Under Armour model, you pick certain athletes that actually fit people who walk the street, and he worked perfectly.

Brian Stann, you'll see Brian Stann on the website because he fits the profile of the extra-large guy in the street working out in the gym.

Again, the number of athletes that have been involved in this product development, above and beyond the 350 that were given product at the fighter summit ... there's a core group of 20 people that we used on multiple, multiple bases for testing and doing photo shoots.

USA TODAY: In terms of actually wearing the gear into the cage for a real fight, how many fighters have done that besides Jon?

BRYAN JOHNSTON: Again, we can't really count it, but you've got everything from the guy who just came over from China (Tiequan Zhang), and then there's a whole list of fighters who typically find on the undercard, that may not have a sponsor, that we gladly give product to.

Quite frankly, going forward, there's more and more. As we develop better products specifically for guys fighting in UFC, you'll see more of them want to wear the product.

USA TODAY: Are you looking to have more of the type of partnerships that you have with Jon Jones, as far as a apparel goes, or is that more of a unique situation?

LORENZO FERTITTA: Look, we're in the very early stages of developing a business plan and a business strategy.

Merchandise is a business that we're pursuing. We're out there talking to multiple different distributors, sporting goods stores in both Canada/the United States and Europe. ... In fact, the line doesn't actually officially launch into retail stores until the fall, is my understanding. So we're just in the very early stages of putting together the marketing plan.

As we've said before, it's very basic and very obvious. You get an 18-year-old kid out there, and how do you create demand that that kid wants to wear the gear? They want to wear what the athletes are wearing. And that's what the basic strategy is.

USA TODAY: Back in 2008 when Affliction was getting into the fight-promotion business, USA TODAY did an interview with Dana White in which he said: "Are you kidding me? It's like me saying I'm going to go out tomorrow and start a T-shirt company and compete with Affliction. The [expletive] do I know about selling T-shirts?"

Since then, what convinced UFC that it should go into that business and investigate that sort of lifestyle apparel?

LORENZO FERTITTA: Well, I think at the time, we didn't have that core competency. Certainly, I'm no expert and Dana's no expert.

But that's why we hired Bryan, who was senior marketing guy at Burton, (which) is a massive retail business – we've recently hired a whole separate infrastructure of guys – and really one of the guys at Burton that was responsible for over $800 million of revenue coming into the company, and multiple different types of merchandise platforms.

And they operate as a completely separate business. They don't know or care who's fighting who, who's doing what, any of that stuff. They're building strategies and plans on their own to build that business, and leveraging the distribution that we have and the billion homes around the world that are potentially going to be viewing the event. They're brainstorming, trying to figure out, "OK, how do we sell more product?"

They believe we sell more product (by getting) the product on our athletes. To get the product on our athletes, we've got to go out and either give it to them or do a separate deal and, once again, provide our athletes with another benefit that other promoters can't.

USA TODAY: Does this cause any tension with the companies that currently pay you fees to be sponsors in UFC?

LORENZO FERTITTA: I don't know. I don't think so. I think at the end of the day, they're looking for the same thing that our guys are looking for: exposure. That's why TapouT and all these other guys want their product on our show because it's an extremely valuable thing. That's how they built their company.

BRYAN JOHNSTON: The other people that kind of surround our business, the majority of them are licensing businesses built on making T-shirts. To do what we're trying to do, you can't do that on a license model. Nike, Adidas, Under Armour – they don't license anything.

We're running this business like a real sporting goods/apparel and equipment business. So that's the fundamental difference, and it's why we don't get the pushback – because they don't have the resources to do it.

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