category: MMA / UFC

The Fundamentals of the UFC ‘Fighter Pay’ Controversy

In continuation of my previous post, let’s now tackle the question: Does the UFC fighter pay controversy have any merit?

Answer: It does not. Here’s why:

  1. The ‘salary’ numbers released publicly  are misleading. One will often hear a fighter rattle off a rather low-sounding ‘salary’ he made off of his last fight. This omits that a fighter’s total compensation is actually composed of a variety of avenues: first, the company itself pays out a slew of discretionary bonuses based on performance (whether it’s for having an active Twitter account, or just a guy who consistently puts on great performances); there are ‘Fight of the Night’ and ‘Submission of the Night’, etc., bonuses (often in the $50,000 range) awarded to half a dozen fighters on each card; there are PPV bonuses (these are  not disclosed and thus do not factor into the publicly-released compensation) — fighters in the main event of a PPV card often have a chance to obtain an extra bonus, for promoting the fight or even a certain percentage of the pay per view buys. Last but not least there are, of course, sponsorship opportunities from many companies eager to work with signed UFC fighters: so much so, that it’s rare to watch an event without seeing a sponsor’s logo on a fighter’s trunks or on the banner his cornermen hoist up.
  2. Sure, Dana White, the UFC’s president, owns expensive artwork and flies on private jets. But don’t many CEO’s live similarly? The most recent statistics show CEO’s nowadays make approximately 273 times the salary of the average worker. Newsflash: CEO’s tend to make… a lot. Now, no one knows what Dana’s or the Fertittas’ actual ‘compensation’ is at the end of the year (also: remember, there is a difference between ‘net worth’ — based on  part ownership of the company — and an actual paycheck) but let’s assume it’s $25 million. Is that really so different from a Hewlett Packard CEO? Let’s also keep in mind — these aren’t your usual CEO’s. These are the guys who essentially started and built the company, at great personal and professional risk over a decade. Did anyone ever call for Steve Jobs’ paycheck to be more ‘equitably distributed’ among the workers in the Chinese factories? No? Then why are there calls for the UFC to distribute its wealth further than it already does among the fighters?
  3. It’s estimated the UFC makes about $500 million per year in revenue. That sounds like there’s a lot to spread around among the fighters, right? Not really. Consider the UFC’s expenses — its non-fighter employees (everything from lawyers to graphic designers to assistants); the promotion costs; the production costs; the marketing costs… the overhead and ongoing costs are staggering. Make no mistake — the company is doing phenomenally well. But to take the $500 million number at face value, and assume it has that amount to ‘share’, is simply silly.
  4. Yes, there are a few guys who end up making $20,000 for the year, especially if they didn’t win or were injured in training. We then hear them complain that “This isn’t enough to live on!”; “Look what NFL players make!”; and “It’s not enough to support my family.”  Here’s where I may sound harsh but to these individuals I would say: “Why did you become a fighter then?” You get to do what you love for work (a rarity) and yet you also expect a guarantee that you’ll be able to make a living at it, and a certain standard of living? Why? If supporting your family is the concern, perhaps a modest, less risk-averse career choice would be the wiser option. UFC fighter Dominick Cruz recently expressed:

    For some reason I can’t understand, everybody believes that because you’re fighting, you should be paid more. Well, you chose to fight. Nobody told you to do it. When I came up in the sport, all the old-school guys, they literally paid money for the right to fight. … We went from that, to where we are now. The UFC built this amazing platform, this amazing brand, and if we choose to take advantage of it, we as fighters benefit. But you get out what you put in.

    And as for the NFL, well, MMA is not football — at least not yet. One cannot compare apples and oranges, especially when it comes to salary.
  5. Then there’s the “But the fighters made this company!” complaint. There’s an aspect of truth to that, which is what makes this the most compelling argument. Chuck Lidell, Tito Ortiz, Forest Griffin… these guys proved to be great stars that helped grow the sport. But the hard truth is: the fighters didn’t make the company — Lorenzo and Frank Fertitta did. You see, the UFC was a struggling company on its last legs when, in 2001, Dana White believed he could make something huge of it. Approaching the Fertitta brothers, who saw eye-to-eye with White’s vision, the Fertittas put forth the money so that the three could buy  the company (sold for $2 million) and slowly but surely began turning it into what it is today. When everyone must have told them they were crazy, Frank and Lorenzo poured a staggering $40 million into the company, even financing and producing The Ultimate Fighter television program themselves. The UFC did not even turn a profit, it is said, until about 2007. For years, these 3 men were pining away on something that could have easily proved to be a huge failure. They took the risk (especially the Fertittas) and persevered. So who really  built the company? The fighters… or the owners?
  6. There would be no UFC without the top brass about which the rebel-rousers complain. When I see a former (or current) UFC fighter complain about his salary, I am tempted to ask them: “So tell me, what would your salary be WITHOUT the UFC? What would your salary be if White and the Fertittas hadn’t come along?” They would likely be making far, far less, fighting abroad for questionnable promotion companies, or, most likely, not fighting at all.
  7. The UFC has created dozens of millionaires. In fact, several have publicly spoken of how grateful they are for what the UFC’s compensation has enabled in their lives. Chuck Lidell, Forest Griffin, and Matt Serra are three great examples.
  8. The UFC is in the business of offering chances. Yes, you won’t start out making much money — but if you excel, the sky’s the limit. Why should a certain ‘comfortable’ salary be a guarantee? There are individuals at Starbucks making $10 an hour; trolley bus drivers in the heat making $10 an hour — you are doing what you love for a living, and you want to make six figures? Why?
  9. The boxing comparison. Of course, no MMA fighter will ever make what Floyd Mayweather pockets — that’s because boxing has only a few major events (if that) per year and a handful of stars. The UFC, in contrast, is broader in both scope and depth. Also, Yahoo Sports’ Kevin Iole had a terrifically eye-opening article recently comparing the payments of two boxing cards with those of two UFC cards. Findings? There wasn’t much of a difference.
  10. There are other options. Fighters are free to fight for Bellator, XTreme, or a variety of other MMA promotion companies. They want to fight for the UFC — yet simultaneously dictate to it what they should be paid? Say what?! Life just doesn’t work that way.
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7 thoughts on “The Fundamentals of the UFC ‘Fighter Pay’ Controversy

  1. Good stuff. I think the toughest thing to judge is that as a privatge compahy, its impossible to know how much the UFC truly is shafting the fighters. My personal belief (and this is base speculation is that the UFC is not as profitable as people think and that they have much more debt than we would normally guess. When you look at ramp up cost and operating expense, that can eat up a TON of profit. Its def a story worth following…not so much the fighter pay, but how successful is UFC truly?

    • That’s a really great point. It seems a lot of people go off the $500 million / year in revenue figure but don’t ask where that figure originated — from the UFC itself, I assume. As you said, its operating expenses are HUGE esp since, unlike boxing, they pay for their own productions (satellite trucks, the works!). With the new free FOX and FS1 cards, are people buying the PPV’s more… or less? Does it create a greater interest in the sport (leading to bigger PPV #’s) or do people think: “Nah, I’m not going to shell out $ for a card”? Perhaps that’s where part of this discussion gets interesting!

  2. and that goes back to our conversation about hotshotting PPV’s (i.e. the Chael Effect)…every company wants to maximize profit, but to me it seems like they are trying to constantly stay ahead of some sort of impending doom. Im a pessimist by nature, so maybe this is just crazy talk….but alot of business lessons can be learned and applied to UFC that WWE had prior to them becoming a public company.

  3. I think firstly….they need to find a way to create stars for the long term. WWE has it “simpler” because its scripted, but the one big fallacy of UFC is the constant turnover of champions/stars. They need to solve that puzzle.

  4. That’s precisely the #1 problem, as I see it. These guys’ careers are shorter than NFL/NBA stars, clearly, due to the physical demands of the sport. Plus, with the fights and constant challenges in an INDIVIDUAL (non-team!) sport, you are bound to fall from the top ranking. So it’s very hard to for a fighter to create a long-term, devout following, as other sports’ athletes do.

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