Why Does the UFC Pay So Little? 8 Possible Reasons

High-level professional athletes make such high salaries that athletic organizations like the NFL, NBA, and MLB have imposed salary caps. The Ultimate Fighting League (UFC), on the other hand, has been criticized for compensation far below that of athletes competing for different organizations. Why does the UFC pay their fighters so little?

The UFC pays so little because it’s a for-profit organization that has suffered financial growing pains. MMA is also a newer sport and fighters aren’t unionized, so earning pressures often lead to injuries and short careers. The UFC also has a single sponsor and, until recently, no public investors.

It’s hard to tell for sure just how much each UFC fighter really takes home at the end of the day unless you’re directly involved with that individual’s career. Unfortunately, this makes it easy for fighters to be underpaid without the general population being aware of it. Keep reading to learn more about how and why the UFC pays their fighters so little money.

How Much Does a UFC Fighter Make per Fight?

On average, a UFC fighter makes between $130k-$140k per fight. While that may seem like a huge amount of money, it’s important to remember that most UFC athletes only fight a few times per year.

The limited occurrences of money earning opportunities presented to UFC fighters is a contributing factor to why they get paid so little overall.

How a UFC Fighter’s Salary Compares

While it’s hard to see the average 2020 income for UFC fighters ($146,000) as “so little money,” that figure pales in comparison to the mega-millions earned by Allstar athletes in (and on) other fields.

Even between similar sports, such as MMA and Boxing, the pay gap is plainly visible. In a famous recent example, boxers Floyd Mayweather and Manny Pacquiao earned $150 million and $100 million respectively for a single, highly publicized fight.

Compared to that, the average income of even relatively high-level MMA fighters appears meager. Although many UFC fighters, such as Connor McGregor, manage to bring in staggering amounts of cash through fights and endorsements, there are plenty of other UFC athletes who don’t. 

The wellness of an industry can’t be measured by its top performers. The highest salaries the UFC skew the income average, which effectively conceals the evidence of many other athletes who are being unfairly compensated.

Even a brief look into the details of how fighters get paid affords a more accurate and disproportionate picture than is by the average income. However, most members of the public never have reason to search out the truth behind UFC payment and compensation.

Reasons Why the UFC Pays So Little

At this point, it’s pretty well understood by many in the athletic industry that UFC fighters are making significantly less than competitive athletes in similar sports. The triumphs of such talents as Connor McGregor and Ronda Rousey show us that it’s not lack of athletic prowess that causes UFC fighters to be underpaid, which leaves many wondering what the real reasons are.

1. The UFC Is a Company First and Foremost

It’s easy to forget that the major league sporting organizations are corporations first and foremost.

The UFC specifically is an MMA promotion company based in Las Vegas, Nevada. Under the leadership of UFC president Dana White, the Ultimate Fighting Championship reported earnings of roughly $900 million. Despite the freeze placed on most of the sporting world due to the COVID-19 pandemic, the UFC performed well and even broke records.

While it’s encouraging to see sports thriving even under COVID-19 conditions, it raises questions among some investors and sports fans as to how the UFC managed to earn a record-breaking profit while so many other companies struggled and even folded.

Dana White claims that the UFC pays their fighters fairly and points out that his company pays higher than its boxing counterparts. This claim is difficult to verify given the complex nature of payment and compensation, although the fact stands that MMA is rapidly becoming more popular than boxing.

The objective of a company is always to make a profit, and the UFC is no different. The UFC “produces” fights, which earn revenue through advertising, pay-per-view, event tickets, etc. The danger of this business model, however, is that it can lead to fighters being seen as assets.

When fighters cease to be human individuals in the eyes of their employers, they become simply a means to an end. When this is the case, fighters are much more likely to be underpaid or otherwise unfairly compensated.

2. Failed IPO and Investor Payouts

MMA exists in a particular niche of the sporting world. While unarguably a valid and highly competitive sport, the accompanying performance and theatrics call WWE to mind. Perhaps thanks to the pay-per-view distribution method, MMA blurs the lines between sports and entertainment.

The ability to market a single fight, which once slated, will bring in the advertisement, viewing, sponsorship, and merchandise makes the UFC an attractive option for investors. Sports teams have long been a favorite investment of celebrities and the ultra-wealthy, and the UFC is right in line.

About 50% of the UFC is owned by Ari Emmanuel of Endeavor, which is a holding company, while the rest of the shares are divided among a group of priority investors. This special group of investors also includes Dana White himself, alongside such A-list celebrities as Mark Wahlberg, Charlize Theron, and others. 

Late last year, when the UFC became a publicly-traded company, Endeavor Group Holdings, Inc launched a $600 million Initial Public Offering. Unfortunately, the IPO fell flat on its face, and all the celebrity investors were left holding the bag.

Spurred by the failure of the IPO, investors demanded that the UFC payout their dividends from its reserve. In all, the UFC shelled out roughly $300 million to various investors, leaving them only $50 million from which they must pay their fighter’s wages and the costs of event promotion.

This sudden draining of the cash reserve, despite following a year of reported success, may be one of the reasons why UFC fighters are paid so much less than other athletes.

3. Reebok Was the UFC’s Only Official Sponsor Until 2021

Many athletes, especially before they achieve international stardom, support their fighting income by accepting sponsorships. This can be anything from sports gear clearly displaying a brand’s logo to television and mobile phone advertisements.

Until 2021, the UFC has an exclusive agreement with Reebok restricting UFC athletes from accepting sponsorship from competing brands. While not illegal to form an exclusive partnership between a sponsor and a company like the UFC, it severely limits the ability of athletes to earn an auxiliary income, therefore making them more reliant on their promotion company.

Reebok is a well-respected and widely known company, but it’s far from the top in the world of sports equipment manufacturers. While sponsorship from a company as large and well-established as Reebok is nothing to sneeze, Reebok doesn’t have as much capital to spend on marketing and sponsorship as larger companies like Nike and Adidas.

 If UFC fighters were actually employees of the UFC, an exclusive sponsorship agreement might benefit everyone involved. However, because UFC are independent contractors, a deal like this reduces their capacity to earn income from other sources, adding to the list of reasons why UFC fighters are paid less.

4. All UFC Fighters Are Independent Contractors

Some sports classify their athletes as employees, while others define the nature of the professional relationship with an individual contract. UFC is one of the sports promoters which employs athletes as independent contractors.

Athletes have varying opinions on the value of independent contracting, as the higher pay and benefits associated with employment are traded off for the freedom and agency that accompany the career of an independent contractor.

The downside of being an independent contractor is the lack of financial stability. While individuals may earn massive amounts in a short time, there’s less guaranteed regularity for athletes. It also places the burden of logistical management more on the shoulders of the athlete than standard employment.

In the UFC specifically, however, the independent contractor status permits athletes to be underpaid without raising public awareness. As a rule, independent contractors receive a lower percentage of the revenue their work creates compared to employees.

5. UFC Athletes Must Fight in Order to Earn

MMA, along with other fighting sports, are among the most dangerous to an athlete’s long-term health. It goes without saying that making a career out of being repeatedly hit in the head does little to extend the life of the body attached to it.

However, due to the nature of UFC fighter’s employment and their limited capacity to support their income with sponsorships outside of Reebok until 2021, it’s difficult for UFC fighters to take time off fighting.

Deteriorating physical ability is often the cause of an athlete’s resignation from a sport. Sports that include violent contact by nature–such as football, hockey, boxing, and of course MMA–naturally take a harder toll on an athlete’s body.

This causes many more athletes either to drop out of competitive athletics or at least to take time off for recovery. If an injury occurs too late in a fighter’s career, they may not ever fully return.

Some athletes will take on other work while recuperating, such as coaching or announcing, but this can’t recreate either financial income athletes miss by not fighting. Because of this, UFC fighters are more likely to fight in spite of injuries, making them still more prone to serious or even fatal injuries.

6. MMA Is a Newer Sport

An athlete’s salary isn’t based solely on their mastery of the sport. The athlete, the event, and the sport itself all must be highly marketable in order for investors and managers to begin paying Allstar wages. In essence, the company needs to know that they are going to make more money from an athlete’s performance and popularity than they pay towards the athlete’s wages.

Mixed Martial Arts (MMA) draws influences from many fighting styles across the world, merging them together into one competition. While many of the styles and strategies employed by UFC fighters are elements of ancient fighting styles, the sport we now know as MMA is relatively recent.

America was introduced to MMA roughly thirty years ago, and since then it has become a national sensation. While Americans have long been known for their love of rough contact sports, their fighting interests were focused mainly on boxing and wrestling.

 The popularity of a sport determines, at least at a basic level, the range of salaries that an athlete can expect to earn. As MMA becomes increasingly popular and even begins to surpass traditional boxing in viewer interest, the rate of pay for its star performers can be expected to mirror that increase.

Because MMA is a relatively recent addition to the sports market, the wages it demands haven’t yet caught up to those of longer-established sports. The short, explosive rounds are effective at keeping viewers’ attention, and the increased drama that comes from a more liberal fighting style is helpful to that effect as well.

Even if/when MMA becomes more popular than boxing, it’ll still not be as popular as other mainstream sports, such as football and basketball. The amount of revenue brought in on an annual basis by these organizations prevents a fair and reasonable comparison between the salaries they offer their prime athletes and those offered to athletes of other sports, even if the sport is only slightly more obscure.

7. MMA Fighters Are Not Unionized

Lack of unionization frequently results in workers receiving much lower wages than their unionized counterparts. According to The Athletic, many UFC fighters show a high level of support for the idea of creating a union.

Increased interest in and demand for unionization is often a symptom of a deeper seeded problem within a company or industry. As more UFC fighters come forward to complain about unfair compensation, the need for union representation grows ever clearer in the eyes of the athletes. 

As of now, there’s no union covering elite professional MMA fighters. Unfortunately, there also doesn’t appear to be a simple road towards forming one. The independent contractor status of UFC fighters makes it impossible for them to unionize in the same way that players in the NBA did, for example.

The lack of unionization puts athletes at a disadvantage when it comes to negotiating wages and ensuring health and retirement benefits. It’s unlikely that MMA will unionize any time soon, especially if they continue to be employed as independent contractors.

Increased demand for unionization from the athletes may be a moving factor, however. If the athletes were to go on strike without assistance from a union, though they would lose pay and potentially their ability to earn pay, it may pressure the industry into allowing for unionization so as not to lose the UFC cash cow.

8. Absence of Public Investors

Prior to 2021, the UFC was a private company under White’s management. The investors funding the organization, as mentioned earlier in the section about the payout, have been made up of wealthy private investors and celebrities. The lack of public transparency was excused as the result of it being a private company until this year.

Without public investors to weigh in on the decision using their power of financial influence, the UFC alone is responsible for its treatment of fighters. Without support or criticism from a public body, the definition of an athlete’s value is determined only by those seeking an immediate, direct profit.

If part of the reason that UFC fighters are underpaid is due to financial mismanagement, there’s hope that the recent introduction of public shareholders to the picture may be helpful. If a person in power isn’t held accountable by public opinion but rather is only checked by their fellow executives, the likelihood of unfair distribution of revenue increases.

Now that the UFC is a publicly traded company whose executives must answer to shareholders and the government’s protection of them, it’s safe to hope that a higher standard of financial scrutiny is applied to the company as a whole.

Across the globe, as technology allows more laymen stock investors to become directly involved with their investments, there has been a shift in focus towards social, environmental, and governmental factors. Examples of this can be seen across the market, such as investors pulling out of private prisons and related companies due to social morality rather than financial sensibility.

The introduction of that investor category, and thereby the court of public opinion they carry with them, may help ensure that UFC fighters receive more proportional compensation going forward.

Conclusion

The UFC’s IPO failure and subsequent investor payout that the UFC underwent means the UFC now has extremely limited funds from which to pay their athletes.

The trauma that MMA inflicts on the body forces many athletes to limit their exposure prematurely, thereby reducing their annual income. There are a number of other factors, such as MMA’s only recently becoming popular or the lack of UFC athlete unions.

Still, a great deal has changed for the UFC in 2021, which inspires hope that UFC fighters in the future will have access to fair compensation for their athletic talents and accomplishments.

Sources

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