Mickey Dubberly left the MMA industry after he says the sponsorship market cratered around the time the UFC struck a deal with Reebok. But he’s back now, pitching potential clients on a novel idea: free management.
Well, almost free. Dubberly, the CEO of KO Dynasty, offers fighters his expertise in contract negotiation and career guidance in exchange for an opportunity to manage their investment portfolio.
Dubberly, who got his start in financial services as a stockbroker and now works as a financial advisor, believes he can not only help fighters advance their careers but also set them up for the future, as well.
“I’m doing this, for one, to build my business, and also help them out financially,” Dubberly told MMAjunkie. “If I can help them out in their UFC career, or Bellator, or fighting career, and help them out with their retirement, it’s a win-win.”
Skeptical? Dubberly understands he’s asking fighters to make a big leap. It’s not lost on him that financial advisors don’t always have the greatest reputation in the business world, and stories abound of MMA managers who’ve siphoned money away from clients. His counter is simple: He doesn’t touch the money.
“The companies they’re writing checks to are the biggest companies in the financial industry,” Dubberly, 42, said. “If they run off with the money, we’re all in trouble.”
The way it works, he said, is that fighters agree to be managed by Dubberly’s company. There’s no long-term commitment, and no percentage taken from fight purses. He interviews the fighter about his or her financial goals, and they decide a comfortable level of investment. Then, he sets up an account, and fighters are charged a one-time setup fee that ranges from 3 to 5 percent.
Dubberly’s cut is an annual portfolio management fee – a rate set by the Financial Industry Regulatory Authority, or FINRA – that ranges from six-tenths of a percent to 1.75 percent of the portfolio’s value. And that’s it, he said.
“Some might want to start with $500, and some will want to invest a lot more, so I don’t have set guidelines in place,” he said.
If you’re wondering how Dubberly is supposed to make a successful business out of $500 investments, the answer is he probably won’t, at least for now. The management fees set by the financial services industry by in large equate to far less than the 10 to 20 percent charged by most MMA managers. To sustain the whole venture, he’ll need to attract more established fighters, or work with fighters who capture titles.
“If I was to charge a management fee, I’d make way more money,” Dubberly said. “Because in my industry, it’s night and day from MMA. When you’re dealing with trillions of dollars and regulatory bodies, I can’t charge what I want on the investment side. It’s all regulated – and it’s a lot less than 20 percent. It’s a lot less than 10 percent.
“In the long run, it will work out for me. In the short term, it won’t.”
Dubberly got the idea to merge his financial advisor job with his MMA management when he kept in touch with fighters – some of whom he managed, and some he didn’t – who’d quickly squandered away the money they’d earned at their competitive peak. One of his clients, a former champ he declines to name, Dubberly said is now on the verge of homelessness after previously making six-figure paydays.
In the heyday of MMA’s exploding pay-per-view business, Dubberly didn’t make it his business to say what a fighter should do with his or her money. But now, he feels the service is desperately needed. Fighters can make more money than ever before. As a result, there’s more to lose if it’s not managed the right way.
“I’ll be able to help some fighters out,” he said. “I think it’s going to open up a lot of people’s eyes in the industry.”
In the meantime, he’ll need to work on the skeptics. Asked about Dubberly’s pitch, former Strikeforce champion Josh Thomson said he’d want to see all the numbers and figures associated with the deal. He said he’d need to interview all Dubberly’s past clients. And even if those checked out, he said, he would be unlikely to invest his money with a stranger.
“Any time you allow someone access to your cash, and what you’ve worked for, the potential is someone could be stealing from you,” Thomson said.
With the majority of his money tied up in real estate and a gym, Thomson likes the idea of being able to see where his capital is invested. It may be a little (or a lot) more labor intensive, but he believes it’s safer.
“I’m not a huge risk-taker, so, to me, the stock market is a huge risk,” he said. “For every dollar I’ve ever earned, I’ve literally been punched in the face.”
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Source: USA Today – MMA Junkie
Read the full article here: KO Dynasty relaunches offering free management in exchange for commissioned financial advisement