Underpaid?: Revenue Sharing in the UFC

May 28, 2008

The UFC’s pay scale has been in the news again lately as part of the Tito Ortiz-Dana White feud. At the UFC 84 post-fight press conference Ortiz went so far as to say that “fighters are treated like slaves” by the UFC. MMAPayout.com has compiled the total disclosed payrolls from the last five UFC events for which payroll figures were made public as well as estimates of the gross revenue (pay-per-view plus live gate) generated by each event:

EVENT PAYROLL REVENUE FIGHTERS’ SHARE
UFC 76 $1,074,000 $11,388,125 9.4%
UFC 77 $812,000 $8,991,875 9.0%
UFC 79 $1,399,000 $16,885,000 8.3%
UFC 81 $1,132,000 $15,885,000 7.1%
UFC 82 $1,112,000 $9,504,375 11.7%
TOTAL $5,529,000 $62,654,375 8.8%

NOTE: Gross revenue estimates are based on reported live gates and preliminary buy rates (assuming a 50/50 split of pay-per-view revenue between Zuffa and cable and satellite operators). Payroll figures are based on officially reported payouts as well as disclosed bonuses.

The most immediate qualifier that must be offered concerning these figures is that the UFC regularly pays substantial undisclosed bonuses in the form of contractually specified pay-per-view bonuses and discretionary performance bonuses. Some of the contracts for the company’s top stars also reportedly include downside guarantees that significantly exceed their disclosed payouts.

However, it is also important to consider the other revenue streams not included in the above revenue estimates, including: closed circuit television, DVDs, video games, television rights fees, sponsorships, advertising, on-demand new media purchases, and other merchandising. Many of these revenue sources rely on the infamous ancillary rights clause found in the company’s standard contract. Per the clause, fighters essentially sign away the rights to their likeness and are not entitled to any compensation when it is used. The clause has been a source of contention in the company’s disputes with Randy Couture and Ortiz.

As a rough comparison to boxing, last year’s HBO Boxing event featuring Oscar De La Hoya v. Floyd Mayweather produced $165 million in total gross revenue. De La Hoya and Mayweather alone combined to take home $73 million for 44.2% of the gross revenue generated. However, it should be noted that De La Hoya’s Golden Boy Promotions was also the promoter of the event.

For the sake of comparison, in a testament to the power of collective bargaining, the percentage share of gross revenue player’s receive in other major sports: 59% in the NFL, 57% in the NBA, 55.6% in the NHL, and 53% in MLB.

Ortiz has indicated that he believes that 30-40% of gross revenues for fighters would be fair.

UPDATE: UFC Revenue Sharing Follow-Up: WWE Comparison

SEE ALSO: Boxing v. MMA Pay Scale & Business Model

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