UFC Lawsuit Reveals (Lack Of) Fighter Pay
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UFC Lawsuit Reveals (Lack Of) Fighter Pay
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Friends,
The Ultimate Fighting Championship (UFC) is one of the hottest companies in sports.
The world’s largest MMA organization recently signed a $100 million sponsorship deal with Bud Light, the single-largest sponsorship deal in the company’s 30-year history. The UFC also closed a $21 billion deal in September to merge with WWE to form TKO Group, and the UFC has already done over $1 billion in revenue this year.
UFC Annual Revenue Growth
2016: $690 million
2017: $750 million
2018: $695 million
2019: $860 million
2020: $890 million
2021: $1 billion
2022: $1.14 billion
2023 (Q1-Q3): $1.009 billion
But while so much seems to be going right for the UFC, one thing is hanging over their head. I’m talking about the ongoing class action lawsuit against the UFC.
For those who aren’t up to speed, a small group of fighters filed a lawsuit against the UFC in 2014, claiming that the company used improper strategies to control the MMA market and create a monopoly. This lawsuit later became a class-action lawsuit, meaning those fighters now represent about 1,200 other current and former UFC fighters, and the judge even said he now wants to fast-track the trial for a 2024 start.
But more importantly, the judge also declared that all records related to the lawsuit be unsealed in a timely manner. This is important because it provides a direct look into the UFC’s approach to fighter pay, including athletes like Conor McGregor, Ronda Rousey, Brock Lesnar, Georges St. Pierre, Anderson Silva, and Jon Jones.
First and foremost, John S. Nash and the Bloody Elbow deserve a lot of credit for breaking down these numbers. The UFC’s documents didn’t disclose each fighter's individual name next to the payout. Instead, the report listed fighters by how many UFC fights they had completed at that point, and John then went through and decoded the names by matching them up with the fighter’s UFC records.
So here is a breakdown of payment information for some of the UFC’s top athletes and biggest draws from 2011 to 2016 (the coverage period of the current lawsuit).
Conor McGregor (of note these were all PPV headliners)
UFC 189 vs. Chad Mendes: $3,285,000 (including a $2.11M discretionary bonus)
UFC 194 vs. Jose Aldo: $4,476,662 or $4,536,932
UFC 196 vs. Nate Diaz: $5,576,315
UFC 202 vs. Nate Diaz: $5,615,490
UFC 205 vs. Eddie Alvarez: $6,812,374
Ronda Rousey
UFC 157 vs. Liz Carmouche: $574,720
UFC 168 vs. Miesha Tate: $1,817,907
UFC 170 vs. Sara McMann: $870,969
UFC 175 vs. Alexis Davis: $1,063,688
UFC 184 vs. Cat Zingano: $1,458,282
UFC 190 vs. Bethe Correia: $2,642,204
UFC 193 vs. Holly Holm: $4,476,662 or $4,536,932
UFC 207 vs. Amanda Nunes: $4,879,766
Jon Jones (of note these were all PPV headliners)
UFC 145 vs. Rashad Evans: $2,278,553
UFC 152 vs. Vitor Belfort: $1,566,196
UFC 159 vs. Chael Sonnen: $2,750,000
UFC 165 vs. Alexander Gustafsson: $1,173,560
UFC 172 vs. Glover Teixeira: $1,237,880
UFC 182 vs Daniel Cormier: $3,637,500
UFC 197 vs. Ovince Saint Preux: $2,677,530
Brock Lesnar
UFC 141 vs. Alistair Overeem: $3,000,000
UFC 200 vs. Mark Hunt: $8,000,000
Georges St. Pierre (of note these were all PPV headliners)
UFC 129 vs. Jake Shields: $4,314,289
UFC 154 vs. Carlos Condit: $3,197,908
UFC 158 vs. Nick Diaz: $4,116,690
UFC 167 vs. Johny Hendricks: $3,555,344
Anderson Silva
UFC 126 vs. Vitor Belfort: $2,506,034
UFC 134 vs Yushin Okami: $2,000,000
UFC 148 vs. Chael Sonnen: $2,506,034
UFC 153 vs. Stephan Bonnar: $2,000,000
UFC 162 vs. Chris Weidman: $3,222,253
UFC 168 vs. Chris Weidman: $4,374,326
UFC 183 vs. Nick Diaz: $3,429,082
UFC Fight Night vs. Michael Bisping: $3,250,000
UFC 200 vs. Daniel Cormier: $4,208,675
Now, a few things come to mind when looking at these numbers. First, they serve as a reminder that earnings estimates from companies like Forbes should rarely be taken at face value. Why? Well, because they said Conor McGregor made $27 million for his Diaz 2 and Alvarez fights and $18 million for his Mendes, Aldo, and Diaz 1 fights when, in reality, McGregor took home less than half of what was reported by Forbes.
But these financial figures also highlight two potential problems for the UFC: increasing competition and future compensation.
Everyone wants to talk about other MMA organizations when it comes to the UFC’s competition — PFL signed Francis Ngannou and recently received a $100 million investment from Saudi Arabia — but the bigger concern might be boxing.
We have already seen several UFC fighters (Conor McGregor, Francis Ngannou, Nate Diaz, etc.) venture into the boxing world for bigger paydays. They are doing this because boxing typically pays out a much higher split in favor of the boxer (70/30).
Take Conor McGregor, for instance. This is a basic example, but if we compare his fights at UFC 196 and 205 to what he would have made in boxing given a 70/30 split, McGregor would have taken home $70 million more during those fights alone.
UFC’s event revenue
UFC 196: $61 million
UFC 205: $66 million
Conor McGregor’s pay
UFC 196: $5,576,315
UFC 205: $6,812,374
Conor McGregor’s calculated percentage of revenue share with UFC
UFC 196: 9.1%
UFC 205: 10.3%
What Conor McGregor could *theoretically* have earned in a 70/30 revenue split with the UFC as a top headliner
UFC 196: $42.7 million
UFC 205: $46.2 million
So, no, I don’t think the UFC will disappear because of boxing. These are two sports that are heading in very different directions. But I do believe boxing has better underlying economics for the fighter, and more UFC athletes will want to try it out.
However, I would argue that the bigger risk is what happens to the UFC (and, therefore, TKO Group) as a publicly traded company if things change.
Think about it this way: The NFL, NBA, MLB, and NHL all have player unions that negotiate collective bargaining agreements (CBAs) on behalf of the players. These agreements stipulate everything from the amount of time players must practice to their annual retirement benefits, and they also explicitly state how much of the league’s total revenue goes to the athletes through revenue-sharing agreements.
The problem? The UFC doesn’t have a union, and its athletes receive just a fraction of the total league revenue compared to their professional athlete counterparts in the US.
UFC Revenue Split Vs. Other Major US Sports Leagues
NBA: 51%
NFL: 48%
NHL: 50%
MLB: 45%
UFC: 13% to 14.5%
This isn’t something that will change overnight. Some people are even speculating that the UFC might have insurance in place to cover any losses from the antitrust lawsuit. However, that is very uncommon, and I would be surprised if it were true.
Regardless, it feels like changes are coming to the UFC’s compensation model. And given that increasing athlete pay would directly impact the company’s 34% profit margin — UFC did $1.14 billion in 2022 revenue and $387 million in profit — it’s certainly something to keep an eye on considering the UFC is now publicly traded.
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I hope everyone has a great day. We’ll talk later this week.
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Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week.