2008-04-14 09:58:52
UFC: Time to Share the Wealth?
|
There was a time when the UFC was on the verge of bankruptcy. Mixed martial arts was a fringe sport - a sport that was on the verge of being outlawed. John McCain called the UFC "human cock-fighting", and the promotion fought an incredibly tough battle to preserve their legitimacy in the eyes of the public.
Then Dana White took over. The cocky and brash president of the UFC took the promotion from the "fringe" to an international phenomenon. Rules were slightly altered (such as wearing light gloves) but not completely changed (the UFC nixed a suggested proposal that their fighters wear boxing gloves).
Gate receipts soared. UFC 82 generated gate receipts of over $2 million dollars, and UFC 83 looks to do even more. The UFC has doubled the number of live events over the past seven years. UFC 83, which is taking place in a 21,000 seat arena, sold out in less than 48 hours.
Pay per view revenues are soaring. The company's events pulled in an estimated $200 million dollars last year, and the sport has shown no signs of slowing down.
Ratings for shows such as "The Ultimate Fighter" continue to track extremely well. Web site traffic is way up. For the UFC, things are good.
The question now becomes - when will the UFC open its purse strings a bit and start shelling out some of those hundreds of millions of dollars in revenues to its fighters?
Sure, the UFC has made millionaires out of some. Chuck Liddell, Randy Couture and Tito Ortiz have all made seven figures from the promotion. Sure, this isn't the entire list, but you couldn't name too many more.
This has already become a sore point with some of the UFC's most marketable fighters. Randy Couture, Tito Ortiz and others have publicly grumbled about how the UFC doesn't seem interested in properly compensating their fighters.
When you look down the list of a typical UFC card and see what each fighter made, you will have a very top-heavy payout chart. The main event fighters will get quite a bit of money, but after that, there is really not much money paid out compared to how much these events are generating. I mean really - how can a fighter on a card like UFC 82 receive just $10,000?
Let's look at the payouts for UFC 82 as an example. As mentioned, the show did $2.2 million in total gate receipts. UFC 81 did 650k buys, so let's assume that UFC 82 did slightly less, at 600k buys. At $45 per buy, that represents $27 million in total revenues. So let's say that with merchandise sales, etc., UFC 82 generated $30 million in total revenues.
You are going to have deductions of course - marketing costs, partnership costs from the PPV's, arena costs, etc. etc. Let's say that the UFC makes $13 million dollars from this event, after these costs.
How much do you think is fair to compensate the fighters? $3 million? $4 million? $6.5 million? More?
Keep in mind that in other professional sports leagues, players will typically receive 55-70% of the total revenues generated.
In this case, at UFC 82, the UFC paid out a total of $932k to its fighters. This is what was reported to the Ohio Athletic Commission by the UFC.
The main event of the show was Anderson "The Spider" Silva vs Dan Henderson. Silva is largely regarded as being the top pound for pound MMA fighter in the world. For headlining this PPV, Silva received $140k in base salary, plus an additional $70k win bonus. So in total, for this event that generated an estimated $30 million in total revenues, the headliner of the card made a total of $210k. If he had lost, he would have made $140k. Compare that to what a boxer will make for headlining a card that enjoys a decent number of PPV buys. They will make multi-millions.
At first glance, it seems decent enough. However, when you consider training costs, transportation costs, etc., it is not that much money. And when you compare it to the total amount of money that was generated by the event, you will see that it is not that much money at all.
Dan Henderson, Silva's opponent, received $100k. So all told, the main event cost the UFC $310k. Not bad at all (for the UFC).
At UFC 79, Georges St. Pierre made $160k in total salary when he defeated Matt Hughes. Chuck Liddell received a flat $500k fee for his fight against Wanderlei Silva, and he is arguably the UFC's biggest star.
As the UFC continues to grow, they will be forced to start paying out more money to their fighters, or risk losing their biggest stars. With some deep-pocketed competition entering the world of mixed martial arts, White and the UFC would be smart to start divvying up some of their riches with the fighters who made the promotion in the first place.
|
