The UFC’s Discretionary Bonuses

August 3, 2010

Billy Baker of the Boston Globe has written a seven page profile on UFC President Dana White which examines his rise to fame. The piece is definitely flattering, but it also doesn’t shy away from what some people might call the “touchy” subjects (e.g., White’s controversial gambling habit).

While the article is an interesting read all the way around, perhaps the most interesting part from a business standpoint was the following quote:

In the past, he’s clashed with some fighters over their pay (stars can make more than a half million for a fight; newcomers can make as little as $6,000, with another $6,000 if they win), and the amount of control he has over their careers (the UFC has no ranking system; White arranges the fights he thinks the fans want to see), and he won’t hesitate to cut a fighter loose. On the flip side, White is famous for handing out discretionary bonuses for fighters who really throw down (he says he’s gone up to a million for a single fight) and has welcomed back fighters who once feuded with him.

Payout Perspective:

The subject of fighter payouts has been covered at length by MMAPayout, but this latest piece of information adds a small new wrinkle. It had been well-documented that the UFC handed out discretionary bonuses (even if there are those that choose to ignore this fact). In some cases it was reported that fighters had their disclosed salary matched by a discretionary bonus (as was the case when Shogun Rua fought Lyoto Machida the first time). Yet, no one had ever heard of a fighter getting as much as an extra million dollars for a fight before.

Not only does this bonus speak to the “take care of us, we’ll take care of you” philosophy at Zuffa, but it suggests that these discretionary bonuses are not limited to an extra $100,000 here or there. It leads me to wonder what kind of checks were cashed in the wake of UFC 116. White was clearly in an excellent mood that night – following what was perhaps the most entertaining fight card in UFC history – and he likely wasn’t shy in rewarding those that participated.

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The sport still has a long way to go in terms of fighter compensation. The fighters are not provided with health insurance or any sort of pension contribution. Some fighters still earn less than $10,000 for a fight. Issues also remain in the royalties department regarding DVD sales and cuts from the video game.

However, it also seems to be the case that no advancement will ever be good enough for some fans. It doesn’t matter that payouts increased 140% from 2006 to 2009. People will always confuse revenue from profit, see that the UFC is generating $320 million in revenue per annum and throw their arms up in protest.

10 Responses to “The UFC’s Discretionary Bonuses”

  1. Machiel Van on August 3rd, 2010 9:25 AM

    I think that one of the instances in which the UFC gives out discretionary bonuses is when a fighter finishes their fight. I remember a Dana White UFC video blog (I’m pretty sure it was for UFC 94, but it also may have been from the CNBC “Fist Full of Dollars” documentary) where he stood in front of all the athletes who would be fighting at the event in the empty arena a few days beforehand, and he told them that ANYONE who gets a submission or knockout would get an extra $20,000. this is probably one of the standard systems of distributing these bonuses, and an effective way of motivating fighters to go for the finish. I can’t say for sure that they do this at every event, but I would think that they would. Also bonuses for exciting fights, etc.

  2. VEe on August 3rd, 2010 9:32 AM

    I think some fans are simply not informed.
    For one, as an MMA rookie in the UFC. The opportunity to make a great deal of money compared to an amateur boxer is huge. Sure guys can complain about the fairness Pacquiao and Mayweather commanding a $20+ million purse but they don’t acknowledge the Mayweather’s 90+ amateur fights before turning pro and Pacquiao fighting for a dollar.

    There’s simply some information that we’re not privy to and I find it odd that many fans judge the UFC based on simply what is reported. Without the Esquire magazine profile, we would have never known about that huge bonus Shogun recieved after “losing” to Machida.

    For the most part I think fans will complain no matter what. I do think it is cool that Zuffa conducts seminars on financial management for the fighters. I think the small things like helping arrange hotel rooms goes a long way. I have heard some veteran fighters voice their opinions about Dana and the UFC, but when you hear long time veteran like Matt Hughes talk about the differences in hospitality when you compare the UFC to smaller organizations . . . it speaks volume.

    End note, I do feel sorry for some of the fighters concerning income from the video game and their rights towards the image and likeness in perpetuity.

  3. Machiel Van on August 3rd, 2010 9:36 AM

    $1 million bonus for one fight? It’s possible, but c’mon, he can say whatever he wants…

  4. Machiel Van on August 3rd, 2010 9:47 AM

    Good point VEe. We really know VERY little of how Zuffa handles its finances. I cited the video blog because those are the only kinds of little windows we have into some of their undisclosed payouts, like Randy Couture’s cashed PPV bonus checks from UFC 68 and74.

  5. TW on August 3rd, 2010 1:43 PM

    The million-dollar bonus was Matt Hughes after the Royce Gracie fight, and MMA Payout reported it here: http://mmapayout.com/2007/12/ufc-labor-relations-back-in-the-news-new-details-on-bonus-structure-white-defensive-and-defiant/. Whether it was technically a signing bonus or one of the famed discretionary locker room bonus is irrelevant here, since the Boston Globe wouldn’t have understood or reported the difference (which you can see when they assert that Dana White is the one doing Joe Silva’s job, since they don’t seem to know who Joe Silva is or what he does).

    It would be interesting to see if anyone other than Hughes has gotten a seven-figure bonus check, though.

  6. Machiel Van on August 3rd, 2010 2:15 PM

    The article is vague, as you stated TW. My guess is the million dollars was just his pre-negotiated PPV bonus for UFC 60, which did very well at an estimated 620,000 buys.

  7. EJ on August 3rd, 2010 8:46 PM

    And you’d be wrong, the UFC has given out plenty of bonus checks that had nothing to do with contracts guys like Babalu have been handed 100k checks for nothing else than showing up to fight in the ME. We’ve seen Shogun get a check after he was screwed over in the first Machida fight and it’s not just guys who fight for the title. I remember an interview with Karo years ago that talked about him being sad that he didn’t win FOTN on a show, then as he was leaving Dana tracked him down and gave him a check for a couple of grand. This happens regularly, people just don’t seem to do their homework and would rather complain about pay than talk facts which are out there if you look for them.

  8. Machiel Van on August 4th, 2010 8:14 AM

    EJ, Dana definitely gives fighters checks if he doesn’t feel they were given their fair shake (he gave Shogun the “win bonus” that was negotiated IN HIS CONTRACT, even though he didn’t win (even paying the taxes on it for him). I don’t doubt there are performance incentives given out, since I explicitly stated that above. None of that necessarily makes me wrong about the Matt Hughes instance. I just don’t see Dana White giving out a million dollar “locker room” bonus in May 2006 to a man who was already one of the better paid athletes in the sport. I could be wrong, but I’m not DEFINITELY wrong. Seems like it would be around what someone like Hughes would’ve gotten as a PPV bonus on 620,000 buys in 2006, based on what Randy got for an event that didn’t perform as well at around 530,000 buys 9 months later.

  9. Machiel Van on August 4th, 2010 8:15 AM

    The point is that the way it was brought up in the article is too vague to be sure, and Dana White has been known to make open-ended financial statements to members of the media that are open to interpretation.

  10. joe on August 4th, 2010 11:30 AM

    commen sense this joe daddy who ever he was going to mexico to get an mri. dana white never taken a punch in the octagon his whole life ritcher by the day. dead end sport for the fighter. dana white is now don king.

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