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.
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.
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.