Why the UFC sale has made things more difficult for the UFC
By Owen Phillips 22/9/16 Views
There is no longer a veil of secrecy over the finances of the UFC after the UFC sale which makes it more difficult when negotiating contracts with its fighters, leading to fighters sitting out or missing deadlines for bookings when landmark events are on the horizon.
On July 11 when the UFC was officially announced to have been sold to a group of investors lead by talent agency WME-IMG it revealed what the UFC has been keeping a secret for it’s existence- it’s worth. The deal for the UFC sale was done for around USD$4 billion and with this price being public information, it gave fighters and their managers something to consider.
Former chairman Lorenzo Fertitta has stated that the UFC made around USD$600 million in revenue for the year in 2015. Dave Meltzer from Wrestling Observer Newsletter stated that UFC profits from that same year were around USD$157 million. Contract dealings with fighters are now based on known figures where previously there was only a vague idea on profits to bargain for reasonable fighter pay. John S. Nash did some great work for Bloody Elbow trying to estimate the finances of the UFC previous to the sale.
There appears to be a lot more fighters saying they won’t fight until the UFC gives them more money since the UFC was sold and the USD$4 billion price tag was revealed. Luke Rockhold, Al Iaquinta, and Nate Diaz (he also previously sat out before the sale for more money) all prolonged negotiations to get (or hopefully get) more money. If you can afford to not fight then it is a smart move.
For someone like Conor McGregor he can afford to sit out and wait for the best deal because he is the biggest draw in MMA. Luke Rockhold has other income from modelling and Al Iaquinta recently got his real estate licence. These fighters love to fight but also need to be paid what they feel is their worth. The UFC would prefer to keep them on reasonable contracts so they can maximise their profits. This is smart business by the UFC.
When the finances of the UFC were unknown there appeared to be a lot less problems getting fighters signed and the prestige of fighting in the UFC was enough to get the deals over the line. The sale of the UFC revealed how successful the UFC has been in recent times and the net worth of the company. This has given fighters a lot more power with this knowledge and they can try to use this to leverage a better contract. Contract negotiations are more likely to be drawn out and put pressure on timelines for huge events such as UFC 205 in New York.
It is now much more difficult for the UFC to keep fighter incomes under control and this will ultimately affect profits in the long term. The sale was really the worst thing that could have happened to the UFC in terms of maintaining their business model.