But it expects the deal will be profitable down the line, with both the UFC and its current stable of 586 fighters benefiting from a cut of UFC-related clothing sales.
"This is an investment we're making in the future," UFC co-owner Lorenzo Fertitta told a media conference call Wednesday. "Why would we do a deal like that doesn't on the surface looks as though it's going to make any money and cost us millions of dollars in the first couple of years?
"Quite honestly because we believe this is going to be successful. We're in it for the long-term, no different than when we invested tens of millions of dollars in the UFC with the hope of turning it around and turning it into what it is today."
The UFC says it is just following the lead of other leagues, which have sponsors for their official apparel.
UFC fighters will not have any choice in the matter. Starting July 11, they will have to wear Reebok gear on fight night and during fight week. They cannot display any other of their other sponsors during that time.
UFC COO Lawrence Epstein said the company is confident the "vast majority" of UFC fighters supported the new policy.
Payment for wearing the Reebok clothing will depend on an athlete's number of fights.
A seven-tier minimum pay structure ranges from US$40,000 per fight for a champion and $30,000 for a challenger to $2,500 for a fledgling UFC athlete who has one to five fights under the UFC banner or other Zuffa-owned organizations.
Fighters with 21 or more fights would get $20,000, with the sponsorship pay dropping to $15,000 for 16 to 20 bouts, $10,000 for 11 to 15 fights and $5,000 for six to 10 bouts.
The UFC says there will be a periodic review of the pay scale.
Previously the UFC had said a fighter's ranking would decide their per-fight Reebok sponsorship pay. But that drew some fire given the rankings, currently determined by a media panel, are subjective.
Fighters will also get royalties from sales of their Reebok-branded gear.
The UFC says all the revenue from the 5 1/2-year Reebok deal will be distributed to its fighters other than what's needed to cover direct operating costs of the program.
Not everyone is enthralled by the UFC-Reebok plan. UFC lightweight Myles (Fury) Jury tweeted a photo of Reebok shoes in a trash can.
UFC president Dana White said Jury had been talking to Reebok before the UFC deal and had a falling out with the company.
"We're going to make it right ... I'm going to have to manage it and fix it," White said.
Fighters are free to have other sponsors, the UFC says. They just can't display them around fights.
Come July, the athletes' Reebok clothing may display another sponsor which the fighters will not share in. The UFC says it is working on such deals and hopes any secondary partner will sign longterm deals and look to sponsor individual fighters.
The UFC has already hired an equipment manager with NFL experience and will have staff to oversee the new clothing program.
Several top UFC fighters like bantamweight champion (Rowdy) Ronda Rousey and bantamweight contender (The Notorious) Conor McGregor already have personal deals with Reebok.
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