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« | Home | »

Mixed bag of thoughts about ESPN’s segment on UFC pay

By Zach Arnold | January 15, 2012

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Photo credit: Zuffa LLC (from interview Lorenzo did with Joe Rogan)

If you don’t have time to watch the full show video, you can read a relatively detailed summary right here.

After watching this morning’s Outside the Lines video piece on the issue of how much Zuffa pays their fighters, I came away conflicted in terms of how damaging or not-damaging the segment was.

Let’s state the obvious — after watching the lengthy segment, there’s nothing new that you and I learned from it. All the issues that have been discussed over the years on this site, on message boards, on Sherdog, and other media outlets were covered in the ESPN piece. The dreaded champion’s clause in contracts, no Muhammad Ali act for MMA, arguments over how much UFC is paying out as a % of business income to fighters, the use of shower/off-the-book bonuses, the FTC investigation into Zuffa buying Strikeforce, so on and so forth. If you’re a hardcore MMA fan, you already know these issues and have an opinion about where things stand.

However, if you’re not a hardcore online MMA fan and you don’t pay attention to the business side of the industry, it was quite a jolt to see ESPN talking about topics like the ’sponsor tax’ openly. Whatever the size of the audience may be for the show (100,000? 200,000?), Outside the Lines is the same program that made waves a couple of months ago with the tapes of now-fired Syracuse coach Bernie Fine’s wife talking about issues relating to Bobby Davis, a former ball boy for Syracuse’s basketball team. I think this, more than anything else, is why UFC has been trying to prepare its fan base online the last few days for what was coming.

There were parts both good and bad about the segment. UFC says that they taped the video interview between Lorenzo Fertitta and John Barr so that they would have evidence to put online to show that, somehow, ESPN unfairly edited what was shown on TV. This tactic by UFC is one used by smarter politicians who have aides taping interviews so that if the media takes statements out of context that the campaigns can release the footage unedited to counter the media narrative. With that said, I really didn’t see much editing from ESPN on the segment that warrants the freak-out reaction that the company has demonstrated in the press. If anything, I think the company’s strong reaction online before the interview aired only drove more people to want to see what the fuss was all about. As for Lorenzo’s interview performance, he did about as good of a job as you could expect someone in his position to do.

However… if there was one ‘wedge’ moment created by ESPN during the interview, it would have to do with the number (%) that UFC pays its fighters. Rob Maysey, our old friend, says the number is around 5-10%. Monte Cox, the one agent who would go on camera for ESPN, also spoke out about UFC fighter pay. John Barr asked Lorenzo if UFC paid its fighters on the a similar level to what the NFL, NBA, NHL, and MLB pay their athletes (the estimate being pushed was 50%). Lorenzo stated that UFC pays their fighters on a similar level. This huge gap between what Rob and Lorenzo claim is paid out is probably the big takeaway if you’re in sports media and you watched the segment.

As for who actually went on camera to speak out against Zuffa? Ken Shamrock spoke for a couple of minutes and, while I understand what he was trying to say about how much power UFC has in MMA, he didn’t articulate his points well enough to the casual sports fans who tuned in to see what the gripe is about. Ken said that if you’re a fighter right now, you don’t have anywhere else to go to make a good living if you anger Zuffa. For most sports fans, they hear a remark like that and their immediate takeaway is, ‘well, if you don’t like what the pay is, go find another job.’ So, in that sense, I didn’t think Ken’s testimony here was all that effective.

The guest panel with Bob Ley during the segment was Ricco Rodriguez (sporting a sweater vest), Josh Gross, and Rob Maysey. If you’re a Zuffa defender, you obviously don’t think this is a fair panel at all. But that’s kind of the point that ESPN, without screaming, was trying to hammer home. John Barr made it very clear that fighters and agents did not want to go on camera to talk about Zuffa because of fear of losing their jobs. As you watched the segment and you realized that the only guys speaking out are those on the outside (Ken, Ricco), the immediate impression conveyed by ESPN (in my opinion) is that UFC’s ‘independent contractors’ are so scared to speak out that it’s like watching political dissidents in a country run by a totalitarian regime. That, I think, more than anything else is why UFC got so hot and bothered by this segment.

The main question to ask is this — is this OTL segment going to stop the Zuffa machine from continuing to run its business as they are currently running it? No. Did ESPN raise the stakes by basically taking topics that the online MMA audience has been talking about for years now to a television platform? Yes. The only way people will end up caring about this OTL segment down the road is if what Lorenzo says in his financial claims are so off base that there becomes a major credibility issue.

Will major MMA web sites address the topics ESPN broached in a serious manner or will this quickly turn into a ‘defend UFC at all costs?’ bee hive mentality? I expect the latter but wish the former would happen. Michael David Smith:

But the fact that ESPN couldn’t get any active fighters to speak — and especially to reveal specific dollar amounts — was the biggest flaw in the report. The report did make a strong case that highly paid UFC fighters make far more than low-level fighters make. In that respect the UFC follows a pay model similar to that of Hollywood studios, where a handful of stars make the bulk of the money, and the bit players are left with much less.

It’s not a bug if it’s viewed as a feature by the reporters.

Topics: MMA, Media, UFC, Zach Arnold | 89 Comments » | Permalink | Trackback |

89 Responses to “Mixed bag of thoughts about ESPN’s segment on UFC pay”

  1. CAINtheBULL says:

    A couple of thoughts on this:

    UFC makes 75% of its money off PPV. Is it really shocking that the guys that move the PPV needle make the big bucks? UFC fighters are not only paid as athletes but as commission sales men. Yes, Sales men because they have to sell PPVs.

    Most of the complaining is probably coming from the mid level guys. You know, the guys, Average Joe Fighters, that are good but will never be champions. They’ll never taste the big paychecks from PPV payouts. The entry-level guys are just happy to be in the UFC.

    PPV sales being down in 2011 versus 2010, proves the Zuffa model right.

    Having fighter’s salary dependent on what they can draw helps prevent Zuffa from losing tons of money. Imagine if fighters were getting big salaries but PPV sales started going down sharply. Zuffa would start bleeding money like crazy. With their current pay structure, Fighters get paid if PPV sales are up but still make a solid base if PPV sales are down. Costs are the same for Zuffa whether PPV sales are up or down.

    Zuffa vs other sports

    Zuffa’s business model is completely different than all the other major sports. They should never be compared until Zuffa makes most of its money from tv fees like the other majors.

    Breakdown: http://harvardsportsanalysis.files.wordpress.com/2009/09/the-nfl-business-model-and-potential-lockout.pdf

    Monte Cox, fighter manager, was on ESPN talking about fighter’s bigger paychecks. Um… He makes a percentage off fighter’s salaries. Of course, he’s pushing for higher salaries, which will mean higher checks for him.

    PPV sales are a popularity contest.

    Like or not, MMA salaries are based on popularity. Nobody likes to realize that fans are blah on him or her. “We like your fights but I wouldn’t want to go out of my way to pay for them. You’re just another name on the PPV.” Every fighter hopes to be a big name, a legend in the sport but most will just an Average Joe fighter. Sad fact but it’s true.

    • Decent points. The one about Zuffa having a different business model definitely shouldn’t be poo-pooed. Like others have said we don’t know what their revenue is, but there’s no way they’re pulling in NFL or NBA money. Right?

  2. fd2 says:

    “The only way people will end up caring about this OTL segment down the road is if what Lorenzo says in his financial claims are so off base that there becomes a major credibility issue.”

    How on earth would anyone ever find out if that was the case? To know that the figure was inaccurate, they’d have to know what Zuffa fighters actually make, and what revenues actually are.

  3. 45 Huddle says:

    1) Lorenzo Fertitta lays the hammer down on a clip that was released by Zuffa. He mentions how ESPN has fighters making $250 on the undercards of ESPN Friday Night Fights. Some fans have said ESPN is not the promoter. While this is true, ESPN is still the ones accepting the cards the promoters give them. ESPN obviously isn’t that worried about combat fighters pay unless it comes from a competing television companies product.

    2) Dave Meltzer believes that the UFC pays out about 25% of their revenues. Which in the current life cycle of the UFC, is about right. What needs to be monitored is if the pay is going up over time and get’s closer to about 40% in the future. I highly doubt it will get to the 50% level as that is where it’s near for a lot of MLB teams and they cut it so close in terms of profits that it would be dangerous for the sport to get that close without risking future peril. But so far we have seen money increase to fighters since 2005, and that needs to continue.

    3) ESPN really tried to get dirt on the UFC and was unable to. Yet they went along with the segment anyways. It certainly shows their motives on the matter.

    4) Just like with the fighters medical insurance, the UFC could go a long way by implemented a “minimum salary”. Of course it now won’t happen for at least 6 months because they wouldn’t want to link it to the ESPN article. But a minimum of a $10k/$10k contract would get a lot of the negative comments off them.

    The program won’t do much at all. The fans like having all of the best guys in one company for the best fights. The top guys are all happy. The the lower paid guys still have a chance to make more money if they improve. And as CAINtheBULL pointed out, the dip in PPV buys shows that what the UFC is doing is correct.

    • Just like with the fighters medical insurance, the UFC could go a long way by implemented a “minimum salary”. Of course it now won’t happen for at least 6 months because they wouldn’t want to link it to the ESPN article.

      I’d go further and say that won’t happen until fighters unionize.

      • 45 Huddle says:

        I looked at the last 5 cards I could find that the UFC pay information was released.

        1) UFC 141: 4 Fighters were on $8k/$8k
        2) TUF 14 Finale: 16 Fighters were on $8k/$8k
        3) UFC 139: 2 Fighters at $8k/$8k…. 1 at each for $7k/$7k, $6k/$6k,& $4k/$4k.
        4) UFC FOX: 5 at $8k/$8k & 4 at $6k/$6
        5) UFC 137: 3 at $8k/$8k, 3 at $6k/$6k, & 1 at $4k/$4k

        That’s a total of:

        $8k/$8k – 30 Fighters
        $7k/$7k – 1 Fighter
        $6k/$6k – 8 Fighters
        $4k/$4k – 2 Fighters

        That’s about an extra $158,000 over 5 cards. Which means if you assume its $158,000 more for every 5 cards if they were to implement such a policy, then it would end up costing them about $1 Million more a year or about $32,000 more per card.

        You might be right, and it wouldn’t happen until a union is formed…. But that’s the general math behind what a policy like that would cost the UFC.

      • fd says:

        People said the same thing about health insurance.

    • Tomer says:

      Dana White’s argument with Dan Rafael on twitter about ESPN and the fighter pay is pretty entertaining.

    • Alan Conceicao says:

      The ESPN thing is a deflection and its meaningless. No one believes a 4 round swing bout on an ESPN club fight card is on the same level as any UFC bout. Well, except 45 Huddle, apparently.

      25% is crap and there’s no reason to assume that its any higher a percentage of revenue now than at any other point. But like I always say, the problem isn’t that they’re shorting guys on the bottom of the card. They pay those guys great by the standards of the sport. Its about paying the guys at the very top. They’re the ones getting shorted huge.

      • 45 Huddle says:

        The point about the ESPN pay is simple…. Get your own house in order before you start trying to go after others first. And a professional is a professional…. Why should ESPN get a free pass for poor fighter pay? If a fighter is good enough to be on a card shown on ESPN, shouldn’t thepay reflect that? Absolutely.

        25% isn’t crap. It’s exactly where it should be in the life cycle of the sport. The popularity still has not leveled off. Nobody knows which way things are going to go. And none of the top guys are complaining.

      • Alan Conceicao says:

        “get your own house in order” LOL. They didn’t target Legend Fighting Championship for low pay because they’re a club show, much as the fights that are on their network. It is an irrelevant deflection.

        25% is mediocre at best. The idea that none of the top guys are complaining is hilariously off base. Do we really need to rewind history on that?

        • 45 Huddle says:

          They targted the same company that was targeting them. Pretty simple. So you are saying ESPN shold get a free pass on fighter pay because of the perceived quality of the shows?

          25% is fantastic less then a decade into the surge in popularity of the sport. And you mentioned paing the guys are the top more. I was just pointing out that none of them have complained. And they all have the power to. GSP could complain tomorrow and still have job security. Brock Lesnar could complain. Randy Couture could complain. And none of them did it. Because guys like Couture, even after that lawsuit issue, got huge bump ups in pay that put smiles on their faces and even got guys like Tito Ortiz to say stuff like: “I’lll never complain about UFC pay again.”

        • Alan Conceicao says:

          The UFC is “targeting them”? In what way? I don’t think ESPN is looking at Fuel to be competition to them. ESPN does get a free pass because the actual quality of the shows are club shows and the actual 4 round fights where guys get paid $100/round are really the lowest tiers of professional boxing. The ESPN license fee and how low it is reflects that.

          You say “none of them complained”. Do you mean in this piece? No, not in this piece. But saying that guys at the top of the card “don’t complain” is being purposely obtuse given the number of guys who’ve done it historically.

        • 45 Huddle says:

          The only guys who have really been vocal about pay are Randy Couture and TIto Ortiz. At least during this current era where the UFC has been successful.

          Tito Ortiz says he is happy now. Randy Couture had somebody else dangling a huge carrot in front of his face that was beyond market value and he wanted to get that payday while he was still in the UFC contract.

          And once again, you are making excuses for ESPN. If it’s good enough to be on ESPN, shouldn’t be of a higher level? That’s basically what you are saying for the UFC.

        • Alan Conceicao says:

          Only Tito and Couture? You mean BJ Penn never had a contract dispute? Or Jens Pulver? Or Rampage Jackson? Why did Rashad Evans get the brush off again for a title fight? I seem to remember Nick Diaz and Alistar Overeem suddenly having big problems with their Strikeforce contracts when Zuffa bought the company then too.

          FNF isn’t even on the primary network; its on ESPN2. Its a club boxing show, occasionally a good one, equivalent to HDNet Fights. No sane people have any illusions about that. You can compare the UFC to Friday Night Fights if you want to. I don’t know why you specifically would want to compare the UFC to club boxing, but feel free to if you want.

        • edub says:

          “They targeted the same company that targeted them”.

          God, you say the dumbest things on this board. Everything else is a matter of opinion and a damn good back and forth, but the strained choice of a connection between a 4th or 5th tier boxing show and the top MMA show in existence ruins the whole thing.

        • 45 Huddle says:

          ESPN would be 3rd tier.

          PPV is 1st tier. HBO/Sho is 2nd tier. ESPN/Versus is 3rd tier.

          Compared to the UFC….

          PPV is 1st tier. FOX/FX is 2nd tier. Fuel TV is 3rd tier.

          It’s the same tier as FUEL TV…. And the UFC is paying $6k/$6k for the lowest paid fighters on those cards…. While ESPN is allow fighters for under $500 on those cards. AND, I am giving you the benefit of the doubt because while FUEL TV and ESPN are each in that 3rd tier, ESPN has many many more viewers.

          Apples to apples. Call my comments dumb, but at least figure out your tiers before you bash me.

        • edub says:

          Nope. I know you don’t know boxing that well, but FnF isnt third tier. That would be showtime. Showtime isnt on Hbo’s level when it comes to spending. And Epix would probably also be ahead of espn.

          Plus there’s that whole business of fuel tv not having a show yet, and Lorenzo’s statements being taken as fact eventhough none were given.

        • 45 Huddle says:

          I gave you the benefit of the doubt on your stupid statement. Now I won’t. I tiered it based on what type of money they are bringing into the sport.

          Tier 1 – PPV

          Tier 2 – HBO & FOX

          Tier 3 – Showtime & FX

          Tier 4 – ESPN & Fuel TV

          ESPN gets like over 500,000 viewers a week for Friday Night Fights. And they have guys on there making under $300? It doesn’t matter if Fuel TV has shown a fight yet. They will have 6 events this year and a lot of prelim fights. None of them will have a fighter under $6k/$6.

          If ESPN was really concerned about fighter pay, they would have done something internally about FNF. They obviously do not care about it when they are footing the bill. But when FOX is footing the bill…. They sure do seem to care.

          And that is the biggest problem. It’s not whether ESPN is the promoter. It is that when they are paying the bills, they show zero concern for the fighters. But when it’s the UFC, they seem to care far too much.

        • edub says:

          The problem is bothing you are saying is accurate. Fnf doesn’t average 500000 viewers. You take a statement by fertitta and present it as fact. And no anything on Fnf is not equal to anything in the ufc. You just sont know boxing well enough to jave a conversation about this.

        • 45 Huddle says:

          FNF does average around 500,000 viewers. Here is my source:

          http://tvbythenumbers.zap2it.com/2011/12/20/espn-friday-night-fights-tv-schedule/114271/

          I know more then you think. You certainly do not from that comment.

          And do you need to know boxing to know that ESPN is not worried about pay on their own network but cares about it’s competitors pay? Not really. That’s common sense.

          Call it what you want…. ESPN has a show that draws over 500,000 a week on average…. And they do nothing about the pay problems on the undercards.

          The UFC has done much better on Versus and in the future on Fuel TV. They aren’t paying guys under $1,000.

        • Alan Conceicao says:

          So ESPN FNF running shows from nightclubs is the same as Fuel TV cards from arenas with 10X the budget? This is getting better and better.

      • Deck says:

        But like I always say, the problem isn’t that they’re shorting guys on the bottom of the card. They pay those guys great by the standards of the sport. Its about paying the guys at the very top. They’re the ones getting shorted huge.

        This. Any extra revenue kicked to the fighters doesn’t need to go to “random last minute Midwest replacement fighters that Joe Silva signed to fill their 10 fight per card minimum.” Right now the UFC’s yearly television contract pays them more than the HBO & Showtime annual boxing budget combined. No fighters main eventing television card on FX or Fuel should be getting any less than six figures guaranteed.

        • 45 Huddle says:

          That is one thing that is still a mystery. We have no clue what type of bonus structure is in place for these level fighters.

          So far none of them really complain. I have always assumed there is a pay increase to the guys main eventing cards.

          But shold a guy fighting on FUEL TV for 100,000 viewers be making $100,000 for a fight? Perhaps this works for FX cards, but does it really make sense for the UFC’s little et project right now?

        • Alan Conceicao says:

          And accordingly, its my opinion that they should be booking high level MMA bouts for that kind of money to be on free TV. Whether Melvin Guillard/Jim Miller meets that definition is in the eye of the beholder. Fact is though that they are getting it.

    • RST says:

      “But a minimum of a $10k/$10k contract would get a lot of the negative comments off them.”

      Lol. ;)

      You know better than that.

      (That a million bucks would stop an intention to complain.)

  4. Phil says:

    This would have been 1000% better if they did it a different weekend and didn’t publish the the preview article, because then lorenzo could have been on the panel and made it worthwhile.

    They are going to bring some issues to the public that they weren’t aware of, but the makeup of the panel, the median income screwup in the .com piece, and some of the things they said are going to leave plenty of ammunition for zuffa when they fire back.

    An honest discussion about fighter pay would be very interesting, but I’m starting to doubt that’s possible.

  5. Jonathan says:

    I think that they could do a lot to improve their image by instituting a “league minimum” like others have discussed. I would make it something like 15k for show and 30k for winning at a minimum, and I am really tempted to write 25k show and 50k for winning. I think that if they bit the bullet and pushed something like that, any heat that they would get regarding fighter pay would go away, or at the very least, be reduced quite a bit.

    • CAINtheBULL says:

      I took the TUF 14 Finale card and made it a $50K guarantee.

      Took it from $780,000 to above $1,300,000. The gate was under $500,000.

      Bad business.

      • Jonathan says:

        Even if I had gone on the high side of what I was talking about, it was only 25k guaranteed, and 50k for those that won. And I said that it was high…which is why I first put 15k guaranteed and 30k for those that won.

        • 45 Huddle says:

          A lot of the Fuel TV and FX cards would be gone if they implemented a minimum that high. Successful PPV’s would have no problem with that minimum. The smaller shows would likely make little to no money.

        • Jonathan says:

          I disagree. I think that the UFC can afford to up their
          guaranteed fighter payouts to 15k/30k, especially if they are making anywhere close to as much money as people say that they are.

        • Jonathan says:

          And my minimum was 15k…in one of your posts you put it as 10k. That is not that far off, and I think that the UFC could absorb the cost increase. However we did differ on the win bonus amount, though we did agree to double their “show” purse.

        • 45 Huddle says:

          It’s more the a singular issue.

          Not only are you increasing the pay of the lowest paid fighters, but it would also naturally increase the pay of the fighters currently around $15k per fight. When $15k becomes entry level, then the guys on their 2nd contract making that amount will then want $20l to $25k per.

          So while the change you are talking about is a $1 Million to $2 Million change throughout the year…. It will have an effect on more fighters and end up turning into a $4 to $5 Million change when everything naturally increases up north.

      • Alan Conceicao says:

        The gate was irrelevant; site fee. Much larger than the gate. Also the biggest piece of the pie as far as income would have been the TV contract. Even Spike paid over a million dollars for shows of that nature.

        • 45 Huddle says:

          So you think it’s smart to basically double the size of the payout for a TUF level show?

          As “Deck” pointed out below, the UFC’s payouts (by Meltzer’s estimates) are in line with other individual sports.

        • Alan Conceicao says:

          Its similar to some individual sports, but hardly all, and all of them have very different business models. NASCAR is a great example of this where the ancillary income for drivers is actually the primary source of revenue. Hell, NASCAR isn’t even operating as the same thing as the UFC.

        • 45 Huddle says:

          Of course they have different models. They are very different sports.

          But we are not talking about these sports doubling or tripling the UFC’s pay (according to what Meltzer reported). We are talking about if the UFC increased their pay 10% of their current overall revenues that they would be passing a lot of these sports. Certainly not a big enough difference for OTL to do a hit piece like this. That’s not much at all. They are within the same ballpark. Fertitta was just full of it when he tried to say they were in the same ballpark as the major team sports…. Which run anywhere from 16 to 162 games anyways and is a bad comparison.

          And like I keep pointing out, in the UFC’s current life cycle, the 25% is good. The PGA has been around for almost 100 years, and they aren’t even coming close to 50% revenue sharing. The UFC is like 20 months away from 20 years, and are already paying out fighters very well.

        • Alan Conceicao says:

          They would pass auto racing and maybe golf. That isn’t “a lot”. They wouldn’t pass a single major team sport.

          Taking 10% of overall revenue and moving it to the fighters based on the estimated annual revenue of the company would be an additional $50 million dollars. I know you’ll say it isn’t a lot of money because that’s your gimmick, but anyone can play with the numbers themselves to see how many times it divides up.

    • Phil says:

      The reality with this is that they aren’t going to every do something like this out of the goodness of their hearts. The big sports in the US don’t have minimum salaries because they want to, they do it because the players make them. The UFC isn’t going to pay someone 15/15 when they will show up for 6 or 8.

  6. mr. roadblock says:

    First off, ESPN loses some credibility for having Ken Shamrock and Monte Cox as the insiders that talk on camera.

    Ken lost a lawsuit against UFC and also basically destroyed Elite XC. That eliminated one of the main places guys could fight outside of UFC.

    The interview would have had a lot more credence in my eyes if Monte Cox was asked what percentage he paid out on all of the Midwest shows he promoted.

    The league minimum comparisons to football and the other sports are not analogous.

    UFC fighters compete 3-4 times per year. Baseball players compete 162 times per year, hockey and basketball players 82 times and football 16.

    An NFL rookie makes a minimum of $375,000 per year. That’s a little under $24,000 per game. That’s what a UFC fighter makes for winning his 3rd fight if he hasn’t earned any bonuses.

    • 45 Huddle says:

      Exactly, comparing it to the major sports is pointless because of the number of times they compete. Baseball players on the league minimum make like $2,500 a game.

      Because of the type of sport MMA is, athletes will compete less often, which will always limit their earning potential on the lower end of the payscale. It’s just a simple numbers game really.

  7. Deck says:

    Both percentages given, the %5 by Maysey and the approximate %50 by Fertitta, are patently absurd and mathematically fallacious. UFC couldn’t possibly produce the year-end EBITA they’ve created in 2007-2010 by shelling out half of their revenue before other operational expenses. Nor could they have spend so much of that EBITA on extravagantly loss leading European expansion, dividends, and aggressive infrastructure upgrades after slicing gross generated revenue in half. Any half-wit who has seen one of the UFC’s bond reports and taken the most rudimentary corporate accounting class can see through that canard.

    Conversely, Maysey recklessly throwing out %5 is as bad, if not worse, than Fertitta’s claim. One expects (unfortunately) a private business owner to be deliberately evasive or inveterately vague when it comes to his proprietary information, but Maysey is attempting to insert himself into an advocacy position that demands credibility. Even without PPV, signing, and bonuses factored in the UFC’s fighter split would be well over %5; christ, you could probably add up the per-diem and get near %5. That leaves us with one of two inevitable conclusions: Maysey is so fundamentally poor at math (he is a lawyer not a engineer, after all) that he is probably not fit to manage a fighters union, or Maysey is pulling that number out of his ass for shock value and to get his name in the paper (metaphorically speaking).

    If Meltzer’s fighter revenue estimate of %25-28 close to accurate – and though it is akin reading tea leaves, it does seem like a far more credible number than either Maysey or Fertitta’s estimate – then UFC falls well short of the big 4 teams sports but close to other individual sports. I believe the PGA/WPGA players split is hovering just over %30 of revenue that approaches 1 billion annually. Nascar is %25. Formula 1 drivers get a lower percentage of gross revenue but that has more to do with the byzantine, stubbornly complex, manner in which Formula 1 revenue is generated (split between a monolithic spider’s web of FIA, 100 year Commercial rights holders, Teams, tracks, local governments, etc…).

    Even though Fertitta’s claims of an 50/50 approximate (I believe he used the phrase “in the ballpark”) are total bullshit, he really shouldn’t have to defend paying less than %50. Frankly, with the UFC’s financial structure (re: debentures) and their aggressive growth plans, they couldn’t possibly stay solvent at that number. Remember, the UFC’s total revenue, no matter what unverified and highly questionable estimate you use, is still under half a billion. That sounds like a lot but isn’t that much of a total pie with the significant expense of live sports operations given they insist on paying for their own production team, if they had the gross revenue of the NFL, NHL, NBA, Nascar and MLB (9, 3, 4.2, 3.8, and 7 billion – respectively) the advocates of 50/50 split would be able to make a more robust claim. Part of their white knighting of undercard fighters is a moot point anyway; if the UFC was to split into a 50/50 endeavor, I suspect you’d see that extra money go towards the top of the card rather than the bottom. They could probably get those dudes who are fighting for $6k/$6k to fight for less than $1k, or just pay some locals $300 to fill up the undercard on the cheap.

    The guest panel with Bob Ley during the segment was Ricco Rodriguez (sporting a sweater vest), Josh Gross, and Rob Maysey. If you’re a Zuffa defender, you obviously don’t think this is a fair panel at all. But that’s kind of the point that ESPN, without screaming, was trying to hammer home. John Barr made it very clear that fighters and agents did not want to go on camera to talk about Zuffa because of fear of losing their jobs. As you watched the segment and you realized that the only guys speaking out are those on the outside (Ken, Ricco), the immediate impression conveyed by ESPN (in my opinion) is that UFC’s ‘independent contractors’ are so scared to speak out that it’s like watching political dissidents in a country run by a totalitarian regime. That, I think, more than anything else is why UFC got so hot and bothered by this segment.

    I’m not sure I entirely agree with this assessment. While I agree that ESPN was trying to paint the picture of a Stalinist wall of silence, there have been reports that ESPN did, in fact, get select UFC fighters to speak on the record. Matt Serra was one of these fighter who, when put on camera, provided a counterpoint to the ESPN thesis that UFC operates as a totalitarian regime forcing fighters to fight for peanuts. However, ESPN, subsequently, made the decision to excise Serra or any other fighter speaking favorably about the UFC in the piece (or rather, when they couldn’t get the quotes they needed to edit into OTL). I don’t doubt that there are current UFC fighters afraid to speak on-record about their discontent or that speaking ill of management on camera would be disadvantageous, but if ESPN discards the footage they do get because it doesn’t fit the tone they want, that’s on them. What is clear, however, is that ESPN decided exactly what the polemic of the feature would be regardless of whether the “on-the-record” testimonials buttressed their argument or not. Thus, by ESPN editorial dictum, we end up with antagonistic panel/OTL featuring fighters who have been exiled – not just by Zuffa – from nearly every major MMA org in the America for various onerous acts and a journalist who has a “history” with the UFC.

    • Alan Conceicao says:

      Part of their white knighting of undercard fighters is a moot point anyway; if the UFC was to split into a 50/50 endeavor, I suspect you’d see that extra money go towards the top of the card rather than the bottom. They could probably get those dudes who are fighting for $6k/$6k to fight for less than $1k, or just pay some locals $300 to fill up the undercard on the cheap.

      The “we gotta pay undercard guys more” thing is exactly what I think is dubious. By getting in the UFC, you’re almost assuredly making more automatically contractually than you do with most club fight organizations. Then there’s the win bonus. Then there’s the bonus checks they hand out. Then there’s the increase in advertising money. Then there’s FOTN/KOOTN/SOTN bonuses that all of those dudes are up for. And the UFC usually even gives guys two fights no matter what! As long as you go out and put on a good performance (from what I hear) you’re probably looking at walking away from a UFC contract, even if you are a total scrub with next to no talent but some heart, with at least $20-25K in your pocket over those two fights.

    • Alan Conceicao says:

      I had a reply to this that disappeared. Boooo. Basically I agreed wholeheartedly with this post for the most part and its a thousand times more well written than pretty much all the professional/semi pro blogger stuff on the web about this. Matter of fact, the other best reply I saw was in BadLeftHook.com’s thread about it. The biggest thing to me is the talk about the undercard guys; I hate hearing it. What Zuffa offers them financially is so much better than what everyone else in the business can offer, it is ridiculous to criticize them. When you look at a guy like Chris Lytle and the kind of money he was able to make – yeah, it wasn’t guaranteed, but the fact that the UFC was able to provide that was enormous.

      Some of the shit they do could be construed as being out of the Don King playbook – Rampage ending a contract dispute when he was given a Audi R8, as an example. But that shit means something to the fighters. No other promotion is going to give shit away like iPads for Christmas to all its contracted fighters. In the grand scheme it isn’t much but it makes a lot of the fighters believe the UFC is on their side.

    • Jason Harris says:

      I don’t have anything to add to this but awesome, awesome reply. Well informed and well researched, and stuff like this is why I like this site.

    • RST says:

      ^^
      Check out the big brain on Brad.

      :)

  8. 45 Huddle says:

    I think some people think I’m against the fighters getting more money. Not the case at all. I just don’t think fighter pay needs to be above more then 25% of revenues right now. Just like how Ken Shamrock busted his balls for less pay a generation ago…. The guys are sort of doing that today.

    With everything constant…. By 2015, the UFC should be paying out 33% of it’s revenues. By 2020, it should be approaching closer to 40%. But it should be done slowly and over time. Not just increase the contracts today.

    If by 2015, fighters aren’t getting 33% of the pay…. Then it’s certainly a topic for discussion.

    • Alan Conceicao says:

      Why would the UFC increase the level of revenues? You say this as if the UFC ever has any intentions of ending “expansion”.

      • edub says:

        Exactly.

        There is no magical end point that Zuffa will suddenly increase fighter revenue. Acting like it can’t be done right now when the owners of the company take out 100 million dollar checks once a year (plus obviously keeping control and stock of the company) is an erroneous point of contention.

        Now if it is your opinion that fighters are doing fine, and Zuffa ownership should be able to make whatever they want is completely different. Many educated fans share this thought.

        • Nottheface says:

          It’s hilarious to read numerous fans working themselves into a lather attempting to justify why fighters make such a small share when profits are so high. It’s pointless because the only justification Zuffa needs is that they are a business looking to make as much money as possible.

        • Nottheface says:

          And not that I don’t think fighters shouldn’t make more but when there is only one real major player in the business and none of the protections other sports have (Ali act or collective bargaining) what you get is this distorted market. None of which is in Zuffa’s interest or responsibility to cure.

        • 45 Huddle says:

          “There is no magical end point that Zuffa will suddenly increase fighter revenue.”

          This is just flat out wrong.

          Pay has gone up naturally since 2005. There is no reason to think that it won’t continue to increase until a proper leveling occurs. They haven’t had any real competition since 2007, and that hasn’t stopped pay from increasing naturally. That’s what fans continue to ignore. There has been nobody to warrant the UFC even getting their pay up to 25%, but it still did naturally. There was nobody competing with the UFC in terms of PPV, but that hasn’t stopped them from giving out 29 fighters a percentage of the PPV’s.

          So far history has shown that the UFC has done what is fair in terms of increasing the money payout to the fighters as the UFC has expanded.

          You guys would make for horrible business owners. You just want to go straight to 40% payouts is insane.

          Think about this…. Pay will naturally go up as the number of fighters on the roster have more experience. In 2005, it was common to see most UFC fighters with 5 or less UFC fights.

          Today, it is much more common to see fighters with 10 to 15 to 20 fights on their resume. Do you think those fighters with 10 fights are fighting for $6k/$6? Nope. Each time they signed a new deal, they are likely making more money. So as the Featherweight, Bantamweight, and Flyweight Divisions are around longer, you are going to see even more fighters who are on their 2nd, 3rd, or 4th UFC contract, and are making more money. Right now, the Bantamweight Division is filled with probably half the guys on their first contract. Come back in 3 years, and that will have changed.

          So already, we can pinpoint entire divisions that will increase in the fighter pay.

          Once again, we all agree on the same premise. More money for the fighters. But this idea that you just want to snap your fingers and see it happen tomorrow is not only insane… But it’s bad business and it’s detrimental to the sport. Let the sport naturally grow…. Just like it has…. And watch the fighter pay grow along with it.

          So far, this has been the case. History is always the best predictor of the future.

        • Alan Conceicao says:

          What percentage of revenue was the UFC paying out in 2005 that they’ve increased from, 45?

        • 45 Huddle says:

          Think of it this way, if tomorrow the UFC paid out 40% of their revenues to fighters…. The Bantamweight Division wouldn’t see that much of an increase because a lot of fighters are at the beginning of their careers. It’s not an established division like Welterweight is yet.

          So in a year when a lot of those fighters get more experience and then go to get their pay raise through the 2nd contract…. Where would the money come from? Somebody else would have to take a pay cut.

          If in 5 years they implemented the 40% revenues, the Bantamweight Division would already be established. So when one guy gets his 2nd contract, another one is on his way out of the UFC. Things naturally take care of themselves. The cycle of that division would be in full swing.

          The UFC is still in the growth phase of their business. Just the mere existence of Feather, Bantam, & Fly Divisions for the next 5 years will naturally increase the level of pay for those divisions.

          Around 40% should be the final goal for the fighters. It’s insane to implement it when 3 of the 8 divisions aren’t even developed and will naturally increase in pay overtime…. Which will move that 25% closer to the overall goal.

        • 45 Huddle says:

          Before 2005, they were losing money, so the percentage of pay they were paying out is irrelevent.

          And you completely ignore my point…. Which is that the UFC still hasn’t completely settled yet…. They are opening new divisions which money paid out down to 25% because it’s filled with inexperienced fighters.

          If 25% is true…. Then Bantamweight is probably at 10% and Heavyweight and Light Heavyweight are probably closer to 33%. Ever think about that????

        • 45 Huddle says:

          Here is what is likely to happen.

          Just the natural progression of the lower weight classes will bring up the payout average. Within 5 years, that will get closer to 33% to 35%. Just the natural flow of the sport will do this. Once again, I’m using Meltzer’s estimates as a baseline.

          In order to get the pay from that 33% to 35% range closer to 40%, a union will need to be formed to fill the gap. Zuffa won’t naturally fill that void on their own.

        • edub says:

          Nothing you put down made my statement wrong. Its a bunch if filler with the end being “there needs to be a union”.

        • 45 Huddle says:

          I told you exactly why it cannot be done right now….

          “Think of it this way, if tomorrow the UFC paid out 40% of their revenues to fighters…. The Bantamweight Division wouldn’t see that much of an increase because a lot of fighters are at the beginning of their careers. It’s not an established division like Welterweight is yet.

          So in a year when a lot of those fighters get more experience and then go to get their pay raise through the 2nd contract…. Where would the money come from? Somebody else would have to take a pay cut.

          If in 5 years they implemented the 40% revenues, the Bantamweight Division would already be established. So when one guy gets his 2nd contract, another one is on his way out of the UFC. Things naturally take care of themselves. The cycle of that division would be in full swing.”

          ******

          It’s like you are void of basic business sense here. No offense, but it’s true.

          At the point where the UFC hits the business cycle peak, is about the time when the percentage of revenues should be maximized. Anytime before then would actually have a negative effect on the sport.

        • edub says:

          Still nothing.

        • 45 Huddle says:

          Then you are just full of shit at this point. I made a valid counterpoint, and you have nothing.

          Do a little research on a business life cycle. Some define it differently, but most of them typically have 4 or 5 stages. Conception, rapid growth, expansion, maturity, and decline.

          When the UFC’s business model reaches the maturity stage, then the fighter pay should be at it’s peak. Right now they are at a transition between the growth and expansion stages. Probably 5 to 10 years away from the begin of the maturity stage.

        • edub says:

          Now its just a whole lotta nothing.

        • 45 Huddle says:

          That’s a nice way of saying you either don’t understand or just don’t have a response. Thanks for playing….

        • edub says:

          Nope its exactly what ut says. Nothing of merit in anything you said.

        • 45 Huddle says:

          Are you ignoring the comments above where you claim FNF doesn’t average 500,000 viewers and then I give you a link that showed the last 2 years were right around that number? And after you claimed I didn’t know?

          Typically you are better then this….

        • edub says:

          No, id be doing better but im ona phone.

          You were right about fnf viewers, that was about the only thing though.

        • RST says:

          As someone above said, there is plenty of money to be made if a fighter makes himself necessary.

          Tito got paid WAY more that he was worth, because he made himself a sellable product.

          I hate to see a fighter underpaid for their worth as much as anybody, and I also hate to see money wasted on a fighter who’s only asset is fanboi BS.

          But this is a democracy.

          It would be the same whatever your trade is.

  9. 45 Huddle says:

    Monte Cox on The UG…

    “I had a 2 hour long interview with ESPN like 6 months ago… I was asked a lot of things and I responded honestly. If I’m going to comment on something, I’m going to use my name… I have never been one of those guys who want to say something but are too afraid of the consequences to have my name on it.

    That being said, 95% of what I said was positive… the UFC has raised pay from 2+2 at the bottom to 6+6… and added bonuses and insurance. I’m always working to get guys in the UFC and have no issue with the pay.

    I didn’t see the ESPN piece, so I don’t even know what was included, but I told them that compared to boxing, unless you are the best 2 of 3 guys in the world, UFC pays far better and works better with the athletes.

    I was asked if a manager felt the pay was too low, what were his options? I said you don’t negotiate with the UFC because there are no real options if you want to make it big in MMA… the option is take what is offered or go elsewhere. The UFC doesn’t get angry if you decide to take a fighter elsewhere, they just pick another guy. There is no shortage of talent waiting for their call.

    With bigger names, of course, there is more bargaining. We were taking about entry level guys when I was asked that question. “

    So here is Monte Cox…. By all standards is an honest guy…. And he says he says about 95% positive things about the UFC…. And yet what they air about the UFC is part of the negative 5% and really out of context.

    ESPN already had their story written before they started the segment….

  10. Robert Poole says:

    A couple of takeaways from this.

    1. Dana White and Lorenzo Fertitta could kill 20 people with AK-47s and 45 Huddle would say it was the victims’ faults for standing in front of their guns. Seriously, you are the least credible person on this board because you’re such a UFC/Zuffa mark/fanboy. If you showed just one tiny shred of impartiality or even ability to speak negatively about your heroes, I think the entire board would die of shock.

    2. Gross, Rodriguez, etc being on the same panel does make it a biased and unfair panel. However the point that people are afraid to speak out is totally valid. Look what happened to Jon Fitch when he got cut in 2008 for refusing to sign an agreement where UFC owns his likeness. You can’t say anything against what White and the Fertittas want to hear without putting your career in jeopardy. White is an emotional, irrational, childish hothead who acts like a punk and has NO BUSINESS being in charge of any major corporation. NONE.

    3. Trying to link ESPN buying cards from promoters to being the same thing as UFC is ludicrous. ESPN pays promoters for 1-2 fights. Their entire payout is for the two televised fights. They don’t pay for the low level 4-rounders that are receiving the supposed $250 payouts that 45 used when he was lobbing bombs out of desperation. That is on the promoters who book the undercard. ESPN pays for 2 fights. Period. That’s it.

    It’s like blaming FOX if the rest of the Velazquez-JDS card was shit. They agreed to air one fight and were only contractually tied to what they aired.

    I’m not saying Boxing Promoters don’t need to get their shit together and be more fair to the rest of their cards because they totally do (especially pieces of shit like Don King and Gary Shaw who abuse their roster regularly). BUT… that being said ESPN’s responsibility is to what they pay for. They have no say on what fills out the rest of the local card.

    So nice try there too.

    UFC screws over fighters. They think they are the only game in town and since they buy up all of the major competition, they pretty much are. And because of it fighters are at a major disadvantage. Not unlike what happened when WCW/ECW folded and Vince now had a monopoly on all the big money shows in North America (and no, TNA has not provided a viable alternative that can offer WWE guys any sort of negotiating leverage).

    • 45 Huddle says:

      So for the past, the guys who made $6k/$6k, but had their fights on Facebook…. Was that okay because no TV station paid for that fight?

      That’s the argument you are making with ESPN. As long as a TV company wasn’t buying it, who cares what the guys are being paid.

      Which one is it? Is it fair pay across the card? Or just fair pay for the fights that are paid for?

      • Robert Poole says:

        You’re trying to muddy the argument.

        ESPN doesn’t promote fights. They buy fights. They offer money for the fights they air. Whatever is on the undercard isn’t their responsibility. The promoters decide who fights on that portion of the show and decides their pay. Just as UFC decides what makes the Prelims and what does not.

        UFC is a promoter. ESPN is a network. A network that buys specific fights. As far as they are concerned the promoter can put on a show with just those two fights. It’s the promoters that decide to fill the card and set the payrates. ESPN has ZERO responsibility for anything they didn’t pay for. The rest of the show is on the promoters.

  11. Zack says:

    In this thread…45 Huddle attempts to make 45 posts.

  12. Jonathan says:

    I will give 45 Huddle credit for sticking to his guns. We all agree that we would like for the UFC to raise fighter pay. How we go about that is different, and I wonder if anyone’s opinion is going to change. Spirited discussion though. Democracy at its finest.

  13. david m says:

    I thought 45 Huddle had touched the bottom of the ocean a long time ago, but he has managed to sink deeper than I imagined possible. Dude, you are arguing like a 13 year-old defending his favorite football player; I am frankly embarrassed for you. No nuance whatsoever or ability to step back objectively and understand why everyone collectively has their jaws dropped from reading how insipid you have become on this thread. Just leave it alone and move on; pretend this didn’t happen and try to build up some credibility.

    I know I know, you will say you are teh critical of UFC because you didn’t order UFC 142. Yet you are so possessed with animus towards anyone who criticizes Zuffa that you become a mindless drone just repeating the same old empty rhetoric over and over. Please re-read your posts about third-tier fighting organizations. When you make claims so absurd that they would make even Chael Sonnen blush, you deserve to be mocked accordingly.

    • 45 Huddle says:

      Not really. It’s just a complete lack of understanding from people that is just crazy.

      Unions and equal pay in the other sports did not occur until the sports hit their maturity phase. The UFC is not at the time yet. They are still in the growth/expansion stage.

      A union should be set-up when everything has settled and everybody can easily decide which part of the pie to conquer. That pie is still being established right now.

      People are jumping far too ahead of themselves by claiming what the UFC fighters should have right now, and it would hurt the long term growth of the sport because of it.

      I am embarrassed for you and the others to not understand this.

      • 45 Huddle says:

        Remember the writer’s strike a few years back to took far too long to resolve?

        Do you remember the main issue? Sure there were smaller issues throughout, but the MAIN issue was how to share revenues of online content.

        The writers wanted a cut, and the studios basically said: “We have no way of knowing what type of business this will turn into.”

        Both sides were right. The problem is that it’s nearly impossible to split up a pie into multiple pieces without knowing how big it will be or what will be in it.

        That’s the problem with all of this union and fighter pay talk right now. You set up a union tomorrow, it will run a huge risk of putting restrictions on the growth of the UFC and actually be counter productive to the fighters long term earning potential.

        The UFC owners are already looking to expand. Let them figure that out, get it set up properly…. Then figure out how to slice things up and for how much.

        What people are suggesting right now would help the fighters more TODAY at the potential expense of even bigger pay for the fighters TOMORROW.

        • Alan Conceicao says:

          The Writers Guild went on strike in the 1980s because studios refused to give them a percentage on videotape sales. They ended up with a percentage after the strike. They also went on strike in 2007 over residuals for a new tool (digital media) and again, ended up with a percentage instead of nothing (which is what they had prior). It is hard to fault them.

          Meanwhile, the UFC owners will be looking to expand in perpetuity. There is no tomorrow in which they increase the percentage of revenue paid out to fighters. There may never have been a yesterday when it increased. End of story.

  14. RST says:

    Does UFC take advantage of their position?

    Sure.

    Was it unfair for UFC to buy out lesser promotions?

    Nope.

    Does UFC undercut its fighters via a monopoly?

    Not really.

    Every bootsy failing alternative that the UFC bought out never paid as much as they do.

    And when they did (Fedor/M1), that was almost the singular reason that they failed.

    • RST says:

      I think the problem is an argument without perspective.

      UFC IS MMA.

      UFC is equivalent to Microsoft.

      Microsoft can set their own price!

      Is it a fair price?

      Who knows without an alternative.

      Is it Microsoft’s duty to supply an alternative?

      Nope.

      • Tom says:

        Microsoft are famous for, and have been routinely punished for their anti-competitive behaviour, you couldn’t have picked a worse example.

  15. 45 Huddle says:

    http://www.mixedmartialarts.com/mma.cfm?go=forum_framed.posts&forum=1&thread=1940773&page=1&pc=210

    McCorkle laying it down. A 1-2 fight in the UFC showing what really goes on….

    All of this talk about fighters needing to get paid more needs to stop. It’s all based on partial information from a bunch of internet geeks who have no clue….

    • Jonathan says:

      If I may add, and in the kindest way possible,

      you are one of those internet geeks, and I believe you have posted more then anyone on this subject.

      Just saying.

  16. Mark says:

    Oh man, the return of the 45Huddle “No, really, I’ll support fighters over Zuffa if they get a Union” talking point is good for some laughs.

    Really, if there was a money issue that resulted in a UFC fighter lockout, you wouldn’t be on here immediately ranting about how the selfish fighters were out to hurt poor Zuffa’s PPV business and jeopardizing the FOX deal by refusing to fight until they get more money? LOL x infinity.

    This is especially laughable because there are so many obvious loopholes to get around this promise. The biggest one will be “I’ll support the Union once they get a better leader.” Chances are more likely that a guy like Ken Shamrock who has a bumpy relationship with Dana would be founding a Fighter’s Union than a Zuffa approved guy like Matt Hughes or someone on their golden boys list. So we’ll get a bunch of “He’s taking out his bitterness for how his career went down on Zuffa! And all these fighters are idiots for getting behind a guy like this! He doesn’t know how business works!”

    And that goes for fans in general, really. Few fans ever support player’s unions when strikes and lockouts occur. It all turns to “These greedy players want more money than they deserve!” and never “These greedy owners want more money than they deserve!” Why would MMA be any different?

  17. 45 Huddle says:

    Sonnen vs. Bisping on FOX and the biggest news of the week….

    UFC is not running a March PPV. I love when the markets correct themselves. 12 maximum per year Zuffa!

  18. nottheface says:

    My Lord, 35% of all the comments have been from 45 Huddle. While I am in way privy to what percentage of revenue the UFC pays to its fighters I can’t be quit positive that it isn’t as high that.

  19. Megatherium says:

    Does anyone find it strange that a sport invovlving two men beating the tar out of each other in a cage isn’t covered by the Ali Act?

    • It really should be. But the honest, simple answer is that the Ali Act was written and passed when MMA wasn’t even on the public’s radar, and right now it’s nowhere near a concern for legislators at the federal level.

      I think it’ll happen. Just needs to be brought to the attention of the right people.

  20. [...] Fight Opinion reacts to the ESPN segment about the UFC and their pay-scale to fighters [...]

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