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Is it fair to criticize a good business model?

Ivan Trembow’s latest post on UFC 62 salaries fits in with a recurring theme on this site – namely that the UFC runs its business more like a professional wrestling promotion than a sports promotion:

Zuffa president Dana White has said in numerous interviews over the years that he would prefer for the UFC’s fighter salary information to not be publicly available, and White said just this week in a Canadian Press article about UFC fighter salaries, “When people know what you make, it causes a lot of problems in your life.”

Unfortunately for White or anyone else who shares his position on the matter, that is simply not how it works with any major sport. Athletes’ salaries are public knowledge in the National Football League, National Basketball Association, National Hockey League, Major League Baseball, and every other major sport.

By talking in various interviews about secret bonuses without revealing the specific amounts (including the following quotes from the Canadian Press article: “Our fighters make a lot of money, a lot of money… we’re thrilled, thrilled that these guys are able to make what they’re making”), the UFC has essentially taken the position that the salaries of UFC fighters are secret.

This is unlike any other major sport and is a lot closer to World Wrestling Entertainment’s position on its performers’ salaries, which makes it very surprising for White to have taken this position publicly. One would think that anything which might invite comparisons to WWE’s business model for paying talent would be avoided.

What Ivan does not mention is that the UFC also resembles a professional wrestling promotion in another sense, it promotes its brand first and fighters second.

Now here is something that may surprise many of you. If I ran the UFC I would likely do the same thing.

If you consider only what is in the UFC’s best interest, and put aside what is in the best interest of the sport of MMA, it makes sense for the UFC to protect information like Ivan describes. It helps them maintain low purses since fighters are less able to gauge their true market value.

It also makes sense for the UFC to focus its energies on branding itself since that makes people believe that the UFC is the sport of MMA, not just one of several promotions. That helps stifle competition, keep salaries low and keep PPV sales high.

But (obviously) I do not run the UFC, so I have the luxury of looking at what is in the best interest of the sport of MMA. In my opinion, what is in the best interest of MMA is for promoters to treat MMA as a sport. Transparency of information and competition are keys to that, even though they alone do not guaranty that the sport will benefit (see boxing). Nevertheless, they are important first steps. Fighters should be able to fairly gague what they are worth, which can only really be done when they know the amount of revenue they help generate. If they know the amount of money they generate, then competing promoters will bid against each other to set a true market value.

So, regardless whether the UFC’s approach makes sense for the UFC, it should continue to receive the criticism it deserves so long as it is not what is best for the sport of MMA.

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6 Responses

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  1. Oneother difference in major sports too, is they NFL, MLB, NHL, etc…all have a union or some kind of players association.

    Wrestling also does not do that as it is entertainment, but then again, even Hollywood as a union.

  2. jalapeño said

    It’s worth noting that, as far as I know, neither PRIDE nor the WFA nor the WEC (or other small-time shows) make their salary info public either. (I don’t know about the IFL.) I still think it makes sense to thump the UFC more than most simply because it’s the big dog as far as MMA in the USA is concerned.

    Question for Stephan or Whaledog or anyone else: Have there been attempts to have a fighters union in boxing? If so, what happened? Would such a thing be possible for MMA fighters? I’d love to see these guys earn better pay and security. They deserve it.

  3. MMA has always resembled Pro Wrestling, more than its resembled a real sport. Its business structure, the way its promoted, everything. Just wait until someone starts challenging Dana White, and their is a turf war for fans and PPV buys in North America. Its not going to resemble anything you see in a sport like hockey, or baseball (where coincidentally the NHL and MLB face NO competition). Its going to resemble WWF vs. WCW.

    If you’re waiting for UFC to start taking their cues from the NFL, or MLB, then I wouldn’t hold your breath. Because Dana White’s similarities to Vince McMahon have been discussed, and written about ad nauseum, and its not changing. The fight game – whether its Wrestling, MMA, or Boxing – is a completely different business than team sports like baseball, hockey, or football.

  4. The interesting thing is that have spoken to a handful of fighters and pretty much all of them said they don’t like having their pay talked about online. A couple of them confirmed that they each made additional money, from the UFC, besides their fight purses.

    How many of us want to have our income talked about in public? Pride keeps it private. K-1 hides a lot of the pay. When they are in the U.S., look at the pay, it is very small. I know for a fact that most of those fighters are paid a lot more than is disclosed to the NSAC.

    Why is it an issue when the UFC starts to make incomes private, yet Pride has always done it with no complaints?

  5. MasterLynch,

    It probably has to do with the fact that state sancitoning requires the UFC to disclose its purses.

    When Babalu officially earns a few thousand dollars to fight for the championshiop in a show that will probably bring in more than ten million dollars, people will naturally talk. When Dana White publicly comments that there is other non-disclosed income, people will talk about that as well.

    When Pride comes to the U.S., and its purses are disclosed, people will talk about that, too.

    Finally, I prefer to compare the UFC to other sports rather than screwed up promotions like Pride. Pride, with its history of worked fights, alleged ties to organized crime, tendancy to sign fighters for freak show value and history of destroying fighters’ careers with mismatches is no standard bearer for MMA business practices.

  6. You make a lot of valid points in your article, Jeff, but you left one key paragraph out of your excerpt from the article that I wrote:

    “There is one other way in which the UFC is similar to WWE and different from the NFL, NBA, NHL, and MLB. Like pro wrestlers and unlike any of the athletes in any of the aforementioned sports, mixed martial arts do not have a union or any form of collective bargaining. Again, this makes it surprising for the UFC to have taken a secretive, WWE-like approach to talent salaries, because it only invites more WWE comparisons.”

    I would imagine that the pay is not going to change too much as long as this is the case, which will probably be for years due to the opposition that this would face.