Outside the Lines Investigates UFC Pay, But Questions Remain

[VCURamFan]

Last week, before this aired, Dana claimed that ESPN & Josh Gross were attempting a "hack job" on the UFC & that he had all of Lorenzo interview taped, as well, so that they could air it in its entirety to prove ESPN was being creative with its edits. Here's some of the "fall-out":

Sunday morning marked the airing of an Outside the Lines segment on ESPN that was denounced by UFC President Dana White before he had even seen it -- a show that presented the UFC's pay model as one that richly rewards a handful of favorite stars while paying the majority of fighters as interchangeable drones.

http://espn.go.com/video/clip?id=espn:7456309

White has already promised a response, and he'll surely say that ESPN's report contained incomplete information about how much the company pays its fighters. And he'll surely be right, for the simple reason that the UFC, like many private businesses, keeps what it pays its workers confidential. ESPN deserves credit for attempting to uncover the closely guarded secret of how much UFC fighters actually make, but specific dollar amounts were lacking in this report.

For all the work that went into the Outside the Lines report, we still don't know how much the UFC really pays its fighters.

"Outside the Lines has spoken with more than 20 current, former and potential UFC fighters, as well as agents and promoters," ESPN's John Barr said as he strolled around a cage in the televised segment. "To a person, they say UFC fighters have not received their fair share of the company's rapidly increasing revenue. Nearly all of them also refused to speak on camera, for fear the UFC would blackball them."

But the fact that ESPN couldn't get any active fighters to speak -- and especially to reveal specific dollar amounts -- was the biggest flaw in the report. The report did make a strong case that highly paid UFC fighters make far more than low-level fighters make. In that respect the UFC follows a pay model similar to that of Hollywood studios, where a handful of stars make the bulk of the money, and the bit players are left with much less.

And while UFC co-owner Lorenzo Fertitta claimed that the UFC pays its fighters in the neighborhood of 50 percent of all the promotion's revenues, ESPN's investigation made a convincing case that the UFC actually pays less than that.

However, there were also some weaknesses of ESPN's reporting, which pegged the actual amount the UFC pays its fighters as "roughly 10 percent of the revenue."

ESPN.com initially reported that the median annual income for UFC fighters was $17,000 to $23,000 a year, citing figures compiled by Rob Maysey of the Mixed Martial Arts Fighters Association. ESPN later corrected that report and said the $17,000 to $23,000 figure was actually the median pay per fight, not per year. However, even those corrected numbers do not appear to include sponsorships, bonuses and other forms of income that UFC fighters make.

And median pay per fight isn't necessarily a particularly telling statistic. Consider a low-level UFC newcomer who signs a contract that guarantees him $6,000 to show, and another $6,000 to win for his first fight, then $8,000 for his second fight and $10,000 for his third. If that fighter fights three times, wins all three fights and earns a $75,000 Knockout of the Night bonus in his third fight, his median pay per fight would only be $16,000. But his total pay for the three fights would be $123,000, for an average of $41,000 a fight.

For an example of an entry-level fighter who has cashed in big time with bonuses, look at Edson Barboza, who signed with the UFC in 2010 after having six pro fights in small regional promotions. Barboza's "show money" is reportedly just $6,000 a fight. But Barboza has won all four of his fights, meaning he also got a $6,000 win bonus for all four fights, and Barboza has received three Fight of the Night bonuses and one Knockout of the Night bonus (including both Fight of the Night and Knockout of the Night on Saturday at UFC 142). Thanks to the UFC's bonus-heavy pay structure, Barboza's total take for his first four UFC fights is at least $348,000, even before any sponsorships or other sources of income.

Even without bonuses, entry-level fighters aren't necessarily doing too badly. One such fighter is UFC featherweight Jim Hettes. Hettes was an unknown in MMA circles, fighting on the regional scene, until he caught a break in August and signed with the UFC on a deal that paid him $6,000 to show and $6,000 to win on his first fight, and then $8,000 to show and $8,000 to win on his second fight. Hettes won both fights, for a total take of $28,000, and is now looking like one of the brightest young prospects in the featherweight division.

For a 24-year-old like Hettes, making $28,000 in five months while fighting in the UFC, with a good chance of making a lot more than that in the future, is a dream come true. ESPN didn't quote any active fighters complaining about their pay on the record and indicated that the inability to find such fighters was a sign that fighters were scared to speak out. But maybe the reality is most UFC fighters are OK with what they make.

In fact, when low-level fighters are released from the UFC because of losses they suffer in the Octagon, they almost universally express a desire to win enough fights in other promotions to earn the right to return to the UFC -- which strongly suggests that they don't view the contracts they've just been released from as onerous.

The handful of mid-level fighters who have been released from the UFC for reasons having to do with issues outside the Octagon (fighters like Jon Fitch, Nate Marquardt and Miguel Torres) also generally apologize for their transgressions and ask to return to the UFC. Again, that suggests that the contracts they were released from were better than the contracts they could earn in other promotions.

And the few prominent fighters who have become free agents, like Tito Ortiz, have generally decided when the dust settled that the grass was greener inside the Octagon than out of it. UFC Hall of Famer Ken Shamrock appeared in the Outside the Lines report, and it may not have been clear to viewers who aren't MMA fans that Shamrock made millions of dollars in the UFC, or that Shamrock left the promotion because he wasn't good enough to win inside the Octagon anymore, not because he objected to the terms of his contract. That was clarified, however, in the panel discussion that took place after Barr's taped Outside the Lines report.

It is true that a handful of well-known fighters have been able to leave the UFC and make more money elsewhere. That includes former heavyweight champions Andrei Arlovski and Tim Sylvia, who both left the UFC to sign with Affliction in 2008. But Affliction fell apart after putting on just two fight cards, which suggests that its higher-paying business model didn't work.

ESPN's report would have been strengthened by addressing other promotions' business models, including not only Affliction but also Bellator and other smaller American MMA organizations. The UFC is by far the biggest MMA promotion and therefore deserves to have by far the greatest scrutiny, but a comparison of the UFC's pay scale with other promotions' pay scales would have provided some valuable context.

Ultimately, as former UFC heavyweight champion Ricco Rodriguez said on Outside the Lines, "The UFC gives you the best opportunity." It would be great to see more opportunities for more fighters, but at the moment, even if UFC pay is lacking, it beats the alternatives in MMA.

[VCURamFan]

Here's the UFC's (first?) response. It's clearly only a portion of the interview. Wonder if we'll get to see the entire thing later.

Hours after ESPN's Outside the Lines aired an investigation of the way the UFC pays its fighters, the UFC released its own video of a portion of UFC co-owner Lorenzo Fertitta's interview with ESPN -- a portion that didn't make it on the air, in which Fertitta said UFC fighters make better money than boxers who fight on ESPN.

http://www.youtube.com/watch?v=Fbbs5...layer_embedded

In that interview, Fertitta points out that ESPN is in a better financial position than the UFC, and yet boxers who appear on ESPN's Friday Night Fights make less money than fighters who appear on basic cable fight cards in the UFC.

"ESPN's gonna make $2.8 billion," Fertitta said. "ESPN -- do you know what fighters make on ESPN fights? There was a guy who walked away in this last fight here in Vegas. ... He walked away with $275 for a four-round fight."

Fertitta said that compared with what those boxers make, the UFC's typical entry-level fighter pay of $6,000 to show and another $6,000 if they win is a good contract.

"I think six and six is pretty good compared to that," Fertitta said. "There's multiple guys on those ESPN cards that make in the hundreds of dollars. I can tell you that our fights that we put on cable, on Spike TV or on Versus, we pay ten times to the fighters what ESPN pays to their fighters. Ten times. And we don't make $2.8 billion. I can tell you that right now."

ESPN and the UFC aren't completely comparable, as the UFC is a promoter, while ESPN is a broadcaster that pays a license fee to boxing promoters. And ESPN reporter John Barr acknowledged in the Outside the Lines piece that entry-level UFC pay is "far in excess of the paydays for many boxers who, at the lowest levels, fight for hundreds of dollars a night."

But Fertitta makes a fair point: Will Outside the Lines also investigate how much the boxing promoters who do business with ESPN are paying their boxers?

Fighter pay is an important issue that should be tackled by journalists. But it's an issue in both boxing and MMA, and ESPN's report could have been strengthened by providing more context by contrasting the pay of UFC fighters with the pay of boxers.

UFC President Dana White said that his company taped Fertitta's entire interview. It remains to be seen whether the full, uncut interview will be made available to the public, either by the UFC or by ESPN.

[VCURamFan]

Before the show was aired, here's what Dana told MMAJunkie.com (Dana's quotes in blue):

RIO DE JANEIRO – UFC president Dana White is less than thrilled with a recent ESPN.com story detailing the financial struggles of UFC fighters.

He's downright incensed at the "spin" video he anticipates from the cable channel's forthcoming "Outside the Lines" piece focusing on the same subject.

So as you might imagine, the fiery UFC boss isn't staying mum on the subject. In fact, he's taking full aim at everyone involved in the project and promises a thorough reply that he says will truly set the record straight.

"I don't even have to see the completed piece," White told MMAjunkie.com (www.mmajunkie.com) following Friday's UFC 142 weigh-ins in Rio de Janeiro. "They didn't even have to show up for the interview for me to know what they were doing. That's why I didn't do the interview. I refused. I turned it down. They wanted me and (UFC co-owner) Lorenzo (Fertitta). I refused and turned it down.

"I want nothing to do with ESPN's sneaky [expletive] 'E:60' and 'Outside the Lines' and all their crock of [expletive] shows. These guys come out with an agenda."

While White declined to talk to ESPN, Fertitta did accept the invitation, and he's among the featured subjects of the "Outside the Lines" piece, which debuts Sunday morning at 10 a.m. ET on ESPN2.

A preview clip of the episode focuses on UFC Hall of Famer Ken Shamrock, who contends the UFC's practices of eliminating their competition have left fighters with few viable options.

"UFC has gone out and strategically bought out every company, or they cut the knees out from underneath them when they tried to get started by putting on shows while their shows were on, which is fine," Shamrock said. "There's nothing wrong with that kind of business, but when you get in that position, then don't use that position to hold the fighters hostage."

White offered little apology for his organization's practices while detailing precisely what he and the UFC did for Shamrock when he brought the MMA legend back to the promotion in 2006.

"This thing started making money in 2005, 2006," White said of the UFC's growth. "It's 2012. If you look at the money the guys made from 2006 to 2012, it's phenomenal what we've done. These guys are coming out, and they got Ken Shamrock. Are you [expletive] kidding me? You know how much money Ken Shamrock owes me?

"Ken Shamrock filed a bogus lawsuit against us and lost. He owes us that money. Do you know what I've done for Ken Shamrock? Ken Shamrock, when I brought him over, he was broke – flat [expletive] broke. He was in income-tax trouble. His knee was shot. I rebuilt his knee. I got him out of income-tax trouble, fronted him a [expletive]-load of money. We gave him money – literally gave him money – $60,000. We gave him $60,000 just to get him back on his feet. You know how much money he made in the two fights he fought with us? It was $2.5 million.

"[Expletive] you, Ken Shamrock."

Speaking to ESPN, Mixed Martial Arts Fighters Association founder Rob Maysey estimated that the median per-fight income for UFC fighters is currently between $17,000 and $23,000, and that the promotion likely only distributes 5 percent of its total income in the form of fighter pay.

White admitted he couldn't estimate the median income off-hand, but he scoffed at the notion the company issn't appropriately spreading its wealth.

"We're right on par with the NFL, Major League Baseball, everybody, which is up in the 50s," White said.

White contends ESPN went on a mission to track down fighters willing to trash the company. According to the UFC boss, when many athletes instead had good words to say about the company, ESPN declined to air their thoughts.

"They went out and tried to talk to all these fighters," White said. "The fighters were calling us going, 'ESPN is here.' One of them notably was Matt Serra. Matt Serra said, 'They come in, they waste my [expletive] time, they set up all their cameras, and when I started giving the interview, they didn't like what I was saying. They shut the [expletive] thing down and left.' We had numerous fighters say that. They were calling me and saying, 'ESPN is showing up and wanted to do an interview, and when they don't like what we say, they leave the interview.'"

It was this reality, White contends, that led ESPN to Shamrock.

"They had to dig so deep they had to find Ken Shamrock, the guy who ends up getting busted for steroids three times after he leaves the UFC," White said. "You couldn't find a more honorable, honest and great guy to come out and interview than Ken Shamrock? I have absolutely zero respect for Ken Shamrock. I think Ken Shamrock is a horrible [expletive] human being."

The interview with Fertitta was filmed in late July 2011, according to UFC officials. White said UFC cameras were also in the room, and he plans to use the footage to offer a full rebuttal following ESPN's debut of the "Outside the LInes" episode.

"I know how they operate," White said. "I've done interviews with them before. What we did is, when they filmed Lorenzo, we filmed them filming Lorenzo. We have the entire interview right there. It's pretty interesting to see how they're going to spin it.

"What I'm going to do is I'm going to watch their piece. Then I'm going to put out a piece with my interview to show how you can really spin it and make stuff look one way or the other. Then I'll show the interview in its entirety."

White said Fertitta also addresses the revenue-sharing issue during the interview, and he believes the UFC co-owner's words will speak volumes when heard in their entirety.

"When you hear Lorenzo's interview and what the facts really are, yeah, I don't even know how they can do this story without spinning it," White said. "That's why it took eight [expletive] months to do."

As a private company, the UFC is not required to open their accounting books to the public, and there is, of course, little value in such a move for the promotion. However, White said many of the issues he expects to be addressed in the piece have changed greatly since this past summer, and he looks forward to proving his critics wrong.

"A lot has happened since [Fertitta filmed the interview], so we're going to play the thing in its entirety and update everybody on what's going on," White said.

For more on UFC 142, stay tuned to the UFC Rumors section of the site.

[VCURamFan]

Here's the UFC's second salvo:

Dana White Calls ESPN Report 'Piece of Trash' as UFC Releases Its Own Report

UFC President Dana White promised before ESPN's Outside the Lines reported on fighter pay that the UFC would release a video of Lorenzo Fertitta's full, uncut interview with ESPN. But what the UFC actually posted online on Monday was something more than that -- it was a full-on rebuttal of the Outside the Lines report that featured not only Fertitta's comments but also comments from White and some of the UFC's fighters.

White introduced the UFC's video by referring to the Outside the Lines report as a "piece of trash" and "one-sided." And while Outside the Lines is generally well-respected for producing high-quality sports journalism, White also said he doesn't respect the kind of journalism that ESPN does.

"They're dirty, they lie, and they never really give you all the facts," White said.

http://www.youtube.com/watch?v=O7neK...layer_embedded

The UFC's response makes the case that the pay scale in the UFC is better than the ESPN report would have had viewers believe, noting that many UFC fighters have become rich for what they did inside the Octagon. However, the Outside the Lines report didn't dispute that -- Outside the Lines acknowledged that the UFC's best draws are doing well financially. Outside the Lines was more concerned with how much the entry-level fighters are making.

Where the UFC's rebuttal report is lacking is in offering any specifics about how much money the low-tiered fighters are making. Fighters like Chuck Liddell, Forrest Griffin and Matt Serra are featured saying they're satisfied with their pay, but those three guys are popular former champions. There still isn't a lot of information available about how much entry-level fighters are making. Fertitta says specific payroll numbers are not something the UFC is interested in revealing.

"We're not hiding anything from anybody, it's just that we don't publish it for everybody to see," Fertitta says. "We're not a public company. There's no reason for us to do that."

The strongest part of the UFC's response comes at the very end, where Ken Shamrock is shown after his final UFC fight talking about how much money he made in the UFC. Shamrock was featured on ESPN talking about how fighters don't get paid enough by the UFC, so that quote from Shamrock is a strong rebuttal.

But featuring Shamrock is something of a distraction from the real issue at hand. The issue isn't whether well-known fighters like Shamrock are making good money, it's whether the undercard fighters are making good money.

The UFC has also chosen not to release information about how much fighters are making from sources like sponsorships and pay-per-view bonuses. For some fighters, those sources of income represent more than what they make in their purses. But we don't know for sure which fighters are getting those kinds of bonuses because the UFC has chosen to keep that information private.

Ultimately, Outside the Lines and the ESPN response offered two sides of a story. And neither side has told the whole story.

[VCURamFan]

Here's the entire, uncut 40+ min interview:

http://www.youtube.com/watch?v=ck0Lb...layer_embedded

I'm just sitting down to watch it, but I dunno if I'll be able to make it all the way through in one take.

[rockdawg21]

I did a calculation on this last May. Thought since the topic is at hand, I'll repost it (took me forever to find it though, lol). Knowing about the ever popular "locker room bonuses", than 10% figure may be accurate, but I'd still say it's lower. It is DEFINITELY nowhere near 50%!

http://www.matt-hughes.com/forums/sh...73&postcount=2

Originally Posted by rockdawg21

I think the 2 main differences here are the percentages taken by the owners of the UFC vs. Boxing promoters (which I calculated at the bottom of the post) and I seriously doubt the UFC is receiving the same $$$ amount in advertising revenue.

Just to give you an idea of the type of money made by the UFC per event/year back in 2008 (25 million/event & about 250 million/year):
http://www.forbes.com/forbes/2008/0505/080.html

And to give you an idea of Dana White's worth:

Now knowing the UFC makes around $25,000,000 per event (using that 2008 calculation) and that the most recent event - UFC 126 had a total disclosed payroll of $1,030,000 (I added all of the payouts from Foxy's post above) this means that ($1,030,000 / 25,000,000) * 100 =

4.12% goes back to the fighters.

That's a pretty small amount for the people who REALLY bring in the revenue. I always estimated they get around 5%, but now we have the proof. Pathetic!

Now I don't know what percentages guys like De La Hoya and Bob Arum pocket from each event, but you DEFINITELY know that boxing pays more than 4-5% back to the fighters, at least on the big events. I was reading an article the other day regarding this subject and it calculated that the average MMA payout is higher than the average boxing payout. The comparison being used here is one of the most major events in boxing history (Pac's guarantee of $20 million and Mosley's guarantee of $5 million), so the numbers are definitely going to look skewed.

If the UFC offers more fighter pay than any other MMA promotion, then what's the problem? Who cares what percentage they're paying? If you can't make more money somewhere else, then the UFC is offering the best deals. Period.

also, found another reason to dislike Ken Shamrock. What a piece of garbage he is.

Originally Posted by County Mike

If the UFC offers more fighter pay than any other MMA promotion, then what's the problem? Who cares what percentage they're paying? If you can't make more money somewhere else, then the UFC is offering the best deals. Period.

Well, one could use that same logic for sweatshops...one pays 5 cents more a day than any of the others, so that shop is 'ok', and not doing anything wrong.

Note - I'm not saying the UFC is a sweatshop, it's simply an analogy to show just because they pay 'more' than other promotions, it doesn't necessarily make it right, period. Other promotions are just making ends meet whereas the UFC is making huge profits.

A better analogy might be to look at what brought about unions in the first place...big bosses running the show giving widely varying wages and arbitrary working conditions...what gets you fired may not get co-workers Rashad & Forrest fired, for instance. Sound familiar? This is why union talk often comes up for the fighters.

As Dana & Lorenzo say, maybe they do pay well above what undercard boxers make, and fighters are ok with it. However, unless the infamous 'locker room bonuses' are on the order of 10 times what the publicized payroll amounts to, it's an outright lie to state they spend 50% of their profits on the fighter's pay.

On another note however, they now likely pay a very hefty amount to the insurance underwriter for the recently instituted fighter's insurance, so maybe they're including that as a payroll expense...the math still does't add up though.

Maybe they're including everybody's salary...the setup/teardown crews, the truck drivers, the light & sound technicians, the executive assistants, the person answering the phone when you call head office...that would make more sense, but they didn't present it as such.

[rockdawg21]

I just watched that full 47-minute uncut interview that the UFC posted on YouTube. Some things were omitted, but it didn't really sway my opinion on fighter pay. Lorenzo's claim of 50% back to the fighters is complete BS.