The UFC has Financial Problems

The UFC continues to set and break records for pay-per-view revenues so how is it possible that they have financial issues on the horizon?

Talk to the everyday UFC fighter and they all give you the same one liner when you ask about the current economic environment in the UFC: “You know what the UFC stands for don’t you? U Fight Cheap.”

It’s true and if the UFC isn’t careful it is going to result in an increasing number of competitive organizations attracting top talent away from the UFC. Instead of a manageable growth in the allocation of pay-per-view revenues to the fighters, there will be a sharp inflection point and salaries will start to mirror those of the other top mainstream sports that constantly have compensation challenges.

Pick any top mainstream sport and you can understand why the UFC will have financial hurdles that are best dealt with now. Baseball anyone?

Year                 Average Salary
1981                 $185,651
1989                 $512,084
2007                 $3.2 million

Right now the UFC is enjoying the profits of the 1981 era baseball. See the issue? The UFC is growing faster than any other mainstream sport, information is widely available and disseminated amongst the fighters and agents and unions are more prevalent now than back in the day. The massive inflection point in UFC salaries is coming… fast.

A logical financial move for the owners of the UFC would be to take their company “public” as the WWF (now WWE) did back in 1999. Raise a pile of money for the company to continue expanding at a rapid pace and provide financial liquidity for the founders. The problem for the UFC at this point with a public offering would be the requirement to disclose their financial results to all of us. We would see the excessive profits being made by the organization from our investment in tickets, merchandise, pay-per-view signups and the paltry amount being shared with our heroes in the ring and they would risk a fan backlash.

The UFC is going to have challenges as a result of its massive success. What to do?

Quick fixes are never easy but the timeline to make changes is short.

Three recommendations for the UFC from the team at MMAtraining.com:

  • Start with putting in a floor payday for any fighter. At $5,000 for showing up and $5,000 for a win, a fighter that loses barely covers the costs to fly his team to the event.
  • Put in place a compensation committee that has fighter representation. It is a step in the right direction and might just fight off a unionized network of fighters in the future
  • Put your money into mma websites

The success of the UFC to date cannot be debated – it is the stuff that makes a good Harvard business case.

What will define the UFC’s ultimate ranking against the NFL, NBA, MLB and NHL will not be the GSP’s or Silva’s but how they handle what is always the most challenging aspect of any successful venture – the money.

14 COMMENTS
  • Aron says:

    thanks very usefull information !

  • MMA Forum says:

    It will be interesting to see how things go from here “in this economy.”

  • MoreThanUFC says:

    Reprinted from the UG, with my permission.

    Where to start…. hmmmm.

    Talk to the everyday UFC fighter and they all give you the same one liner when you ask about the current economic environment in the UFC: “You know what the UFC stands for don’t you? U Fight Cheap.”
    What fighters say this other than Handy? If you are a no name and get 5k/5k, that’s probably a 5 fold increase over the last org you fought for.

    Pick any top mainstream sport and you can understand why the UFC will have financial hurdles that are best dealt with now. Baseball anyone?
    Right now the UFC is enjoying the profits of the 1981 era baseball.
    So the UFC has the combined profits of 32 baseball teams? Teams that enjoy huge tax breaks, have multiyear multibillion dollar TV broadcasting rights, teams that sell an average of 32000 tickets 162 times a year, teams that each have hundreds of thousands of ppl that support them, and have massive merchandising sales? Bullshit.

    Year Average Salary
    1981 $185,651
    That is an Average. In 1981, Nolan Ryan signed the first 1 mil per contract ( I’m pretty sure on that ). The lowest paid players made around 40k per year. That is over a span of 162 games plus spring training. 5k 4 times a year is a heck of a lot better than that.

    We would see the excessive profits being made by the organization.
    What are you, a fucking communist? The UFC is a privately owned company. It was purchased by two guys that gave themselves, gave themselves, a one in three chance to succeed. They have the right to make as much as the market will dictate.

    At $5,000 for showing up and $5,000 for a win, a fighter that loses barely covers the costs to fly his team to the event.
    His team doesnt need to be there. His seconds/cornermans flights are covered by the UFC, as is the hotel, the food, the saunas, the workout rooms, etc, etc.

    And there it is….
    You have ignored this user.

  • Jack Sprat says:

    To Chessplayerrit.

    You obviously have no idea how financial reporting works. Being a puclic company means your numbers are open to the public.

    You have no idea what you are talking about. I work for an accounting firm and I’m an accountant and this is what we do and all public companies are required to have their Financial statements audited and released to the public and quarterly reviews done every 3 months.

    PS. The website line was a joke you turd.

  • This Article Sucks says:

    - Put your money into mma websites

    What a stupid article. You’re one of these many MMA marks who thinks they know how to run a large business better than the real professionals. There’s a reason why you’ll never write for a real MMA business website like MMA Payout, and are stuck writing biased, poorly researched articles on a piss-ant site like MMATraining

  • Chessplayerrit says:

    This article is a joke. There are MANY types of public companies that do NOT have to report their financials. They are considered very high risk and don’t get many buyers, but it’s not always required.

    This article is written by an idiot who doesn’t know much about anything.

    Invest in MMA websites? What the hell does that mean?

    He provided 0.00 evidence of the UFC’s financial troubles.

  • c says:

    You and everyone else who compares the ufc to the big four sports financially are retarded.

    The UFC is following the WWE business / financial model. They have nearly identical revenue streams. That’s who u should be comparing numbers (rev, %) with.

  • Phil Baroni says:

    I’M THE BEST EVA!!!!

  • cameldogFTW says:

    @Flashburn no kidding not to mention Sherwood looks like he needs to put down the Mcdonalds and get his fat ass into the gym.

  • Flashburn says:

    Why would the UFC put money into an anti-UFC website like Sherdog. Sherdog is a fuckin joke. Jeff Sherwood is a moron.

  • Yes, the UFC needs to put more money into Sherdog.com and other MMA websites. Very good point and I really enjoyed the article. Give me a call Matt Seen I might have some work for you.

  • Horn O'fplenty says:

    website comment was a joke.

    as is your weiner.

  • Horn O'fplenty says:

    website comment was a joke.

    as is your weiner.

  • Paulie G says:

    LOL! Tell you what, go to the first two fighters on the card of Cotto v Margarito boxing PPV and tell them UFC counterparts get $10,000 and they’d cry.

    “Put your money into mma websites” WTF does that has to do with anything? UFC has a website they’ve put money into, is it called “UFC.com” I think.

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