The UFC and the union: the labour questions ahead for MMA

SportsPro explores the foundation of the MMA Athletes' Association, and its potential consequences for the sport.

The UFC and the union: the labour questions ahead for MMA

As 2016 drew to a close, the mixed martial arts (MMA) world witnessed the birth of a new fighters’ association. The MMA Athletes Association (MMAAA) is not the first group established with the aim of improving fighters’ working conditions, but it demands considerable attention due to the star power driving it forward. 

Three former Ultimate Fighting Championship (UFC) titlists - Georges St Pierre, Cain Velazquez and TJ Dillashaw - were joined by Donald Cerrone and Tim Kennedy, plus former Bellator chief executive Bjorn Rebney, to launch the MMAAA on a two-hour conference call in the last week of November. 

That announcement outlined three immediate objectives for the association, all of which relate specifically to the UFC. 

Firstly, the association wants fighters to be better compensated.  Specifically, they call for revenues to be split 50/50 between the promoter and the fighters, as is the case in other sports leagues like the National Basketball Association (NBA). St Pierre claims that fighters currently receive around eight per cent of income generated by UFC, and argues that even athletes like Conor McGregor and Ronda Rousey are underpaid. 

Secondly, the association voiced its concerns over the lack of medical protection for fighters. During the conference call, the founding members of MMAAA spoke unequivocally about the dangers of the sport. Velazquez reflected on the seven major surgeries he has had since turning pro, while St Pierre alluded to the long-term trauma and personality issues that can result from repeated concussion. Currently the UFC offers fighters no pensions, and only limited medical support.

The association’s third goal is less clear. Rebney revealed that the MMAAA intends to negotiate a substantial settlement to compensate past and present fighters for what it sees as the UFC’s previous malpractice. 

Rebney’s involvement has led to a number of raised eyebrows from within the MMA community, and drawn the ire of UFC president, Dana White (above). During his tenure as head of Bellator, he was subject to allegations of wrongdoing. When Eddie Alvarez wanted to leave the organisation for the UFC, Rebney brought a lawsuit against him. However - as the fighters were keen to stress during the conference call - his role is strictly advisory. It is the five of them who comprise the MMAAA’s board.  

More importantly, the negative attention generated by Rebney’s involvement is outweighed by the value he offers. As the former Bellator chief executive, he is one of only a handful of major promoters in the sport’s history.  

Kennedy explained in an interview on The Luke Thomas Show: “We can't go into the conversations without understanding the nuances and subtleties that exist within the promotion - the things that promoters do to garner money, the types of partnerships they create, from vendors using the arenas to sponsors with the promotion to ticket sales to pay per view sales to website content to partnerships with networks[ . . . ]He has the knowledge and the expertise that maybe nobody else besides Scott Coker and Dana White have.”

Plus, while the fighters remain just that - professional fighters, with rigorous training regimes - Rebney has no other obligations, and looks set to focus all his energies on his work with the MMAAA for the foreseeable future.  His unpopularity may render it necessary for the board to downplay his involvement, but his input could be invaluable.  

Understanding the risk that these fighters have taken requires an appreciation of the UFC’s monopoly within MMA. UFC 202 was watched on around 1.65 million North American televisions. No other non-boxing pay-per-view (PPV) event has ever done more than a million buys. In fact, no other MMA organisation has the viewership to regularly run PPV events:  when Bellator attempted one in 2014, it sold 65,000 views. No PPV UFC event has failed to reach the 100,000 buy mark in the last decade. So moving from the UFC would necessitate a drop in salary, competition and exposure. Yet these five were willing to jeopardise their careers in order to form the MMAAA. To understand why requires a more comprehensive look at the business driving this very modern sport. 

When, in 2016, WME|IMG acquired the UFC for around US$4 billion, MMA’s status as the world’s fastest growing sport was cemented.  It is almost unthinkable that, just 15 years earlier, Frank and Lorenzo Fertitta purchased the organisation for US$2 million. In that time, the promotion has gone from being considered freakshow savagery to mainstream entertainment. The WME|IMG acquisition arrived on the back of two major partnerships: an apparel agreement with Reebok, and a broadcast deal with Fox. But while the UFC has continued to grow at a remarkable velocity, fighter pay has not progressed so quickly. 

At a cursory glance, St Pierre’s assertion that the UFC pays fighters eight per cent of its revenues appears accurate. Former owner Lorenzo Fertitta claimed that the UFC had revenues of US$600 million in 2015. During this time it made 946 pay-outs, at what should have been an average of US$50,739. Looking at the total pay-outs for two events in 2015 - UFC 182 and UFC Fight Night 80 - would indicate a mean fighter pay of US$43,609.

So statistics suggest that an average fighter competing three times a year will earn between US$130,000 and US$150,000. That may be viewed as underwhelming, considering that the organisation is the pinnacle of the sport, and that travel, training, and medical costs will have to be deducted from that figure. 

And the numbers make for increasingly troubling reading when the anomalous salaries that the UFC pays its stars are removed. At UFC 205 the total fighter pay-out - excluding bonuses and sponsorship - was US$6.616 million. Of that figure, Conor McGregor (above) received US$3.5 million - a 52.9 per cent share - which means the the organisation’s biggest star earned more than his 22 colleagues combined, before his PPV earnings are even factored in. That is staggering, especially given that UFC 205 was a star-studded event featuring three title fights. 

Indeed, the difference between what the UFC pays its crossover stars and the paycheques the promotion’s other top fighters receive is cavernous. Lightweight contender Khabib Nurmagomedov received just US$52,000 - including a US$26,000 win bonus - for appearing at UFC 205. He would seem to be on an eventual collision course with McGregor, but – based on that figure – would have to compete more than 129 times to earn the amount his rival received that evening. 

None of this is to suggest that salaries of UFC fighters have remained entirely stagnant. St Pierre received US$3,000, plus a US$3,000 win bonus, for his debut in 2004, whereas a debuting fighter today can expect to receive at least US$10,000 from the UFC, plus another US$10,000 for winning. But many fighters in the organisation still struggle financially, and most of the roster is still locked into contracts comprised of a base fee, which is doubled for a win. Myles Jury highlighted the repercussions of this, claiming that a fighter on a US$10,000/US$10,000 contract will - after expenses - take home around US$5,500 if they win, but just US$1,500 if they lose. That is a level of uncertainty unimaginable to many athletes. 

The dispute has been brewing for years, with fighters’ cries growing louder each time the promotion takes a major stride forward. Nothing signals promotional growth like major agreements: if the US$100 million a year broadcast deal struck with Fox in 2011 announced the sport’s arrival to the mainstream, it was the subsequent apparel agreement with Reebok that truly altered the relationship between the fighters and the UFC. To understand the MMAAA and its formation, it is necessary to unpack how that partnership affected the working conditions of athletes in the UFC. 

When the apparel agreement with Reebok was signed in 2014, it was considered a major coup for the UFC. Whereas previously fighters had been at liberty to promote their own sponsors, the new deal meant that Reebok would serve as the sole in-cage and fight week sponsor. This bestowed the UFC with a more professional look, and brought the organisation closer to leagues like the National Basketball Association (NBA) and National Football League (NFL). 

However, the promotion did not consult fighters before agreeing the partnership. This is significant because it had major repercussions on their earnings. Prior to the Reebok deal, sponsorship was a major source of income, with shorts and banners often crammed full of brand logos. The partnership with Reebok put an abrupt end to this. In fact, the sportswear brand’s sponsorship exclusivity during the build-up to fights, as well as in the cage, meant that it became very difficult for anyone except the most marketable fighters to gain any outside sponsorship agreements.

Reebok sponsorship money is paid through a tiered system, with the amount of money a fighter receives depending on how many times he or she has appeared in the UFC. A fighter who has appeared between one and five times will receive US$2,500; a fighter with six to ten appearances under his or her belt would get US$5,000; 11 to 15 appearances would entitle an athlete to US$15,000; more than 21 appearances, and the deal is worth US$20,000; championship contenders receive US$30,000, and world champions take home US$40,000 with each defence. 

The most striking flaw with the Reebok agreement is that it has a negative financial impact on almost every fighter on the roster. Former UFC heavyweight Brendan Schaub claims that, prior to the deal, he was earning more than US$100,000 in sponsorship money every time he fought. Post Reebok, that figure would have dropped to US$10,000. The UFC’s elite aren’t maximising their earnings, and those just starting out in the series are increasingly struggling. Even the most unheralded prospect would be able to generate considerably more than US$2,500 in sponsorship money, simply by virtue of appearing in the UFC. 

The deal has also been criticised as discriminatory against women, who weren’t admitted into the UFC until 2012. By nature of this, no woman has yet appeared 11 times inside the octagon, so if you are female - unless you are fighting for a title - there is very little sponsorship money to be made. Miesha Tate’s partner, Bryan Carraway, suggested that she was earning more than US$60,000 per fight in sponsorship money before the Reebok deal. She earned US$5,000 from Reebok in her last fight. 

Indeed, the partnership has been so unpopular among fighters that it has led to high-profile departures from the UFC. In the last 12 months, former champion Benson Henderson and top contender Rory MacDonald have left the promotion for Bellator. Popular cutman Jacob ‘Stitch’ Duran went, too. All cited the Reebok deal as a significant factor in their exodus, stating that they would ultimately earn more outside the UFC once sponsorship is considered. 

MMAAA board member Tim Kenedy weighs in at UFC 206

Furthermore, the uniform deal intended to entrench the UFC further into the world of mainstream sport has drawn into focus the differential in treatment between UFC fighters and athletes in America’s major sports leagues. Take the NBA. Players are employed by the league. They have their training, travel and health costs covered, are guaranteed a pension, and have a voice in terms of how the league is governed. Even an undrafted rookie is guaranteed to earn US$543,471 for his first season, a figure set to spike dramatically once the new collective bargaining agreement (CBA) comes into effect. And many have suggested that the NBA’s uniform deal is less restrictive than the UFC’s agreement because players are free to choose their footwear. 

By contrast, the UFC does not employ its athletes. They are independent contractors, without any of the freedoms that title would suggest. As fighter James Krause reflected when interviewed on the Three Amigos podcast: “I've been in the UFC for over three years now, and I still don't feel like I have a secure job. Even if I win, I never feel comfortable there, ever. I feel like they could cut me at any point. They get all of the benefits of being an employer; they get all of the rights to my name, my image, my video and I can't work anywhere else. I don't get the rights of an employee; I don't get a salary, a 401k. They say we have insurance, but we don't. It’s horseshit. The deductible is US$1,500. I just had a torn hamstring, and I had to pay for the whole thing myself.”

Fighters were also not consulted about the WME|IMG takeover. Rebney states that the takeover should have been a watershed moment, and that the global agency’s first priority should have been restructuring fighter pay. But thus far, it has not appeared to be on the new owners’ agenda. In fact, WME|IMG executives have taken an altogether different approach. Since the acquisition, they have fired around 400 employees - 15 per cent of the promotion’s global workforce. More worryingly for fighters, these redundancies are supposedly just the first step in a process through which the company intends to save US$71 million. 

Athletes in the UFC have seen their organisation become one of the most valuable sporting properties on the planet. Some were competing in MMA prior to the Fertittas’ acquisition of the UFC in 2002, and may reflect that the body’s dramatic increase in value owes a considerable amount to their efforts. Yet fighters remain comparatively unrewarded, while WME|IMG takes an annual US$25 million management fee, and has co-opted in a slew of high-profile stakeholders – Sylvester Stallone, Calvin Harris and Tom Brady included – to continue driving the promotion towards mainstream success.

Given the metamorphosis that the UFC has undergone, it was inevitable that cries for improved working conditions would increase in volume. But now that the MMAAA has been established, questions remain about what can be expected to happen next.

Put simply, fighters will either get on board with the MMAAA or not. There is no guarantee of unanimous support for the association: the MMA Fighters’ Association (MMAFA) - a body with similar long term goals - has been operating for some time, but has failed to attract major media attention or unify the sport. It has been widely suggested that if more UFC fighters had joined, they would have been in a stronger position to counter the Reebok partnership. 

If enough fighters endorse the MMAAA, the association could well look to implement a collective bargaining agreement. The basic tenets of such an agreement seem clear: that a higher percentage of revenues is allocated to fighters; that the UFC offers retired fighters pensions; that current fighters are given more comprehensive medical assistance; and that the Reebok deal is restructured. Any CBA should also include minimum UFC salaries, and guarantee fighters with financial assistance in case of long-term injuries. 

Protecting those who are least financially secure should be the primary goal of any fighters’ association. Because, although every fighter on the UFC roster may consider themselves underpaid, the top ten per cent are making a very comfortable living, while the rest genuinely struggle. Ensuring fighters entering the UFC are guaranteed an improved basic contract would benefit fighters and fans. It would force the UFC to reconsider its treatment of undercard fighters as disposable assets, guarantee a more rigorous scouting process, and give fighters a degree of financial certainty. 

If the UFC were to reject such an offer, the possibility of industrial action is not unimaginable. However, it would have to be unanimous, and would require the promotion’s stars - who hold almost all of the power - to risk their short-term earnings for the benefit of the sport. If, in the long term, UFC fighters and executives are unable to reach a compromise, that may give rise to new promoters appearing in the sport, staging one-off PPV events. 

The UFC cemented its status as mainstream media in 2016, perhaps even confirming its position as a more reliable PPV earner than boxing in the US. Given the opportunity that exists, its stranglehold on the MMA market cannot continue unendingly. 

Whether the MMAAA can generate the desired reform remains to be seen, but there is no doubt that the argument over fighter salary will rage for some time. 2017 is expected to be another record year for the UFC. With the Fox deal expiring in 2018, rumours abound that the company will be seeking a new broadcast agreement worth US$450 million per year. The UFC is still a long way from rivalling the NBA or the NFL, but it gets closer to America’s major sports leagues every year. As it is further legitimised in 2017, and as more athletes announce themselves at stars, it will be fascinating to watch the dispute over fighter’s salaries play out.