Yesterday, Michael Rome of Bloodyelbow.com made the case for salary reform in the UFC in order to better accommodate both the fighters and the sport as a whole:
It’s time for the UFC to restructure the Pay Per View percentage contracts for main event fighters. They began as a good faith way to reward fighters when the company does well, but these deals are unresponsive to the UFC’s needs, and they are unresponsive to the needs of the sport.
The last year of Anderson Silva’s career provides a good example of why the Pay Per View percentage deals do not make sense for the UFC. After signing a deal with a Pay Per View bonus, Anderson Silva headlined UFC 90, and got a terrible payday because the buyrate was so poor. He then took an extended break, and agreed to fight Thales Leites only because he was told that either St. Pierre or Chuck Liddell would be on the card as well. The show broke the 600,000 buy mark, and Silva made a killing.
Silva’s next Pay Per View fight was against Forrest Griffin in a marquee match on a huge show with two main events. The pay was great, and now Silva is playing the game again. He refused to fight on the UK card, and while people think he is ducking Henderson and Marquardt, I think his real goal is to get on a stacked New Year’s card for the buyrate.
Payout Perspective:
I agree with Rome.
While by no means an indictment of UFC practices, a contract should very much be considered as the formation of a working relationship between two entities for the purpose of mutual benefit. I understand that the UFC takes pretty good care of its fighters, but there still exists a certain amount of disagreement between the fighters and UFC management. Thus, it makes sense that the contracts should change and adapt when the relationship itself changes.
The UFC is growing almost exponentially – certainly faster than anyone had even anticipated 2-3 years ago, let alone 8 years ago when Zuffa bought the organization – and so the contracts need to be changed in order to better reflect the realities of the business environment.
Rome correctly points out that top draws like Silva are susceptible to volatile pay days, because of the linkage to PPV buys within their contracts. BJ Penn is another fighter that has outright refused to fight on UK cards unless he receives compensation commensurate with what he’d receive from the PPV points of a North American event.
It’s not fair to the talent, nor is it working for the organization to have its best fighters avoiding certain markets all for the sake of money.
A potential solution which guarantees a greater sum of money, but pays slightly less for large PPV events – where the points would really benefit the fighter – might be an amicable solution for both parties. The guaranteed money vs. maximum payday is a common swap in sports business.
The single point of contention, here, likely comes from the HR realm where advocates of self-funding compensation programs are going to argue in favour of profit-certainty; more guaranteed money is a greater risk to the UFC. Fortunately, I’m not convinced this concept is necessarily applicable to MMA.
The idea behind self-funded compensation is that an employee funds his/her own pay through revenue-generating performance. Yet, there exist many variables and determinants of fighter compensation that are out of the fighter’s control. In other words, you cannot establish performance-based compensation upon something other than performance.
In the long run, any short-term losses that the organization incurs as the result of more guaranteed money are likely to be out-weighed by the benefits of having its best fighters engaging in bouts across the globe – not just in specific, highly lucrative markets.
Note:I also thought Rome made a good point about the generation of MMA stars. It’s something quite reminiscent to the “put over” in wrestling, whereby a new star needed to beat an old star to become relevant.
The old guard of MMA needs to give way to the new guard inside the cage or ring – that’s the only way fans are going to take notice. It’s very much a “king of the hill” mentality, and until a fighter has faced and defeated top-notch competition, he’s really irrelevant. The old stars are still very much important because they legitimize the new stars, and that’s how the cycle continues.
“…there still exists a certain amount of disagreement between the fighters and UFC management.”
I do read this by analysts like you and countless times by posters like me. However, in the past 6 months, I never seem to find anyone to provide proof/quotes that there are any actual fighters complaining about pay in the UFC. Oh, I’m sure you’ll find a few disgruntled non-main-eventers that feel they should be paid more. What job or what industry does not have that? But find me a Top 20 fighter in the past 6 months that has said, “You know what, I’m not compensated fairly, and I’m not going to take it anymore.”
However, your point about fighters not wanting to participate in overseas events is fairly well documented. BJ Penn and Anderson Silva are two headliners who have been on the record about this. My questions are: #1. Don’t you think the UFC knows this now and will fix this? I bet they’ve “taken care of” Couture. Or #2. Is it possible they just don’t care? Maybe they don’t even want their champions or North American headliners on these cards because they’d rather focus on European talent and the gate revenue and PPV revenue don’t justify putting their big-salaried fighters on the card anyway.
I disagree with you and Rome that the model is broken. In the current model, the fighters are heavily incented to be self-promoters. There is a clear link between what makes their company money and what makes them money. Doesn’t this just make sense? Kelsey, you remind me of “that guy” in the company’s payroll department who gets all upset about how much the sales staff make. Did you forget that he or she is on commission and if they don’t perform, they don’t eat? This is all simple, first-year business stuff. If you don’t think it’s fair, go watch a Michael Moore movie or something.