When news of a $4 billion sale of the UFC was first reported by FloSports’ Jeremy Botter, it was met with mixed emotions and uncertainty.
Think what you want about UFC President Dana White and the Fertitta brothers but it’s hard to deny their impact on the world of combat sports.They took the UFC from the brink of bankruptcy to a multi-billion dollar business on the rise.
With a television contract expiring in 2018 and an ever-growing streaming service, UFC Fight Pass, the product projects well for years to come.
Dana White maintaining his role as President also helps ease the transition between the Fertittas and new owners WME-IMG. As much as the Fertittas accomplished in terms of finding talent and building a profitable business model; they did very little to create superstars.
The UFC lucked into a slick talking Irishman with a heavy left hand and an outspoken female fighter with an unbelievable armbar. Those two mainstream success stories don’t erase years of missed opportunities.
If there’s an aspect WME-IMG can approve upon, it’s the cultivation of star talent. Elias Theodorou, Al Iaquinta & Aljamain Sterling are just a few examples of colorful characters that receive very little help from the UFC. For WME-IMG to spend $4 billion on the UFC they must realize that they can create 10 Rouseys and 20 Conors with the proper placement and marketing.
As the star power in the UFC increases, so will the profit margin. That’s where the UFC fighters must unite and further the amount of earnings given to the talent.
Rumblings of a UFC fighter’s union have been around for decades but until recently the independent contractor philosophy was enough to keep fighters happy. The UFC eliminating private sponsors last summer and signing a uniform contract with Reebok was a sign of things to come. It’s a move indicative of a professional league or college program, not a fight promotion.
That is just one example of how the UFC has become more professional organization than promoter. The addition of mandatory USADA testing, mid-deal contract restructuring and increased fight scheduling were all signs of a massive change. Those change resulted in very little benefit for the fighters.
With the sale of the UFC final and a larger corporation governing the organization, opposed to just a triumvirate of pals, the fighters can make a legit case for unified representation.
If we consider the UFC to be on par with a singular sports team in the major American sports, the $4 billion price tag is comparable to some of the more successful teams, then we can show how a union can improve the fighter’s careers.
Take the NBA, they renegotiated their collective bargaining agreement (CBA) last summer and received close to a 50-50 revenue split with ownership. Here are some of the finer details of the deal courtesy of CBSSports:
The cap is calculated on a percentage of revenue, which has exploded by $1 billion in the last three years alone. It’s essentially a 50-50 split among players and owners. This coming season marks the first year of the league’s nine-year, $24 billion TV deal with ABC/ESPN and Turner. Silver, his predecessor David Stern and the former executive director of the players’ association, Billy Hunter, did not anticipate such a massive increase — from an average of $930 million a year in TV revenue to $2.67 billion.
That, coupled with the union’s new director, Michelle Roberts, rejecting the league’s proposal to smooth the money into the system gradually, has resulted in a spike in the cap from $70 million last season to $94 million this season and a projected $110 million next season.
A singular team in 2016 will have $94 million to spend and that number increases by $16 million in one year. If the UFC followed a similar model based on earnings & TV contract then their roster of 621 fighters (via UFC.com) it’d give them an average of $151,368.76 to spend per fighter or $1,468,750.00 for an estimated 64 events in 2016.
As a reference, UFC Fight Night: “Dos Anjos vs Alvarez” paid out $1,121,000 to fighters (via Sherdog), which is $3 million dollars below the average number we calculated for an event. Considering its placement, during UFC International Fight Week, this Fight Night card paid out well above what the televised cards demand.
On the highest end of the scale, UFC 200 paid out $6,979,000, but part-timer Brock Lesnar accounted for $2.5 million of that guaranteed money.
For some this just looks like a bunch of numbers but for the fighters these are bargaining chips. When boxing PPVs are bringing in half the numbers, yet paying out main event fighters 3-6x as much guaranteed money there’s a problem.
If you throw in the lack of healthcare, life insurance and pensions; the fighters are getting the short-end of the metaphorical stick.
No one expects these contractual problems to change overnight but if the UFC wants to carry themselves as a professional organization then the fighters must act as full-time employees, not independent contractors. It’s the difference in working in a Burlesque show on the Las Vegas Strip and dancing in Little Darlings strip club on Industrial Road.
For fighters to truly demand their worth a union would have to be established before the television deal is signed in 2018. That’d allow both sides to sit at the table and hash out a revenue split that is both fair to the new owners and the fighters risking their health to bring in money.
The time for fighters to unite is now but the window won’t remain open for very long.