UFC Fighter ‘Wage Share’ Held Steady At 19-20% For 11 Straight Years

UFC fighter pay has been a topic of wide media coverage lately. From the fighters themselves to Jake Paul to a recent analyst question on UFC owner Endeavor’s earnings call. The coverage generally doesn’t compare UFC compensation to other MMA promoters such as Bellator, PFL, or ONE Championship as the UFC has been the highest paying MMA promoter, something even the plaintiffs suing the company for alleged antitrust violations have acknowledged.

The topic becomes more controversial when fighter pay is examined as a percentage of revenues associated with a promotion’s operations, also known as Event Revenues. This “wage share” is then often compared to other sports such as the NBA which, as part of its collective bargaining process, currently splits all Basketball Related Income (BRI) in a window of 49-51% with its players.

While BRI is the relevant revenue metric for the NBA and its players, it’s also a complex one, taking 30 pages to define in the league’s most recent collective bargaining agreement.

The related metric for the UFC – Event Revenue – only takes a single sentence to define. It’s described in the antitrust lawsuit as “Ticket Sales/Site Fees PPV/Broadcast Sales/Fees (including ‘Web Buys’ and ‘Other’), event-specific Merchandise, and event-specific Sponsorships.” In other words, all promotional revenues derived from or recognized with specific UFC events. From 2011-2014, event revenue accounted for 90-94% of the UFC’s total revenue each year, according to antitrust documents and a 2016 lender presentation. From those numbers, it appears the difference between the UFC’s total and event revenue each year is mostly comprised of certain consumer products and certain sponsorships not tied to the promotion’s events.

The lawsuit also provided 6 ½ years of hard data on how much of the UFC’s event revenues were paid to fighters each year as compensation. The results were remarkably stable for a growing promotion whose fighters are all independent contractors who don’t collectively bargain over revenue splits. The annual wage shares all came in around 19-20%.

Reliable documentation of UFC wage shares in the 19-20% range have been publicly available for almost three years now. They exclude the more recent years of 2018 to present day as those numbers are generally redacted in court documents.

But what about the promotion’s wage shares with fighters prior to 2011?

Bloody Elbow’s John Nash used a variety of court and internal documents to paste together a picture of the UFC’s historical wage share. This piece takes a different approach and uses a single source – the event revenue and fighter compensation data relied on by both sides in the antitrust case. The expert report of Dr. Hal Singer detailed the fighter wage shares above for 2011-2017. For 2010 and earlier, the data was a bit harder to come by until an economist on the UFC’s expert witness support team, Dr. Joshua Lustig, used Singer’s dataset to document the average share of event revenue each fighter took home from 2005-2013.

Lustig’s analyses combined with the average number of UFC bouts per event in each year provide a separate projection of wage shares from 2005-2013.

The problem with these new “unweighted” wage shares is they treat all UFC events the same: the bigger pay-per-view (PPV) events and smaller Fight Night shows. From 2005 through May 2017, PPV events generated more than 80% of the UFC’s event revenue yet would typically pay smaller percentages to the fighters on those cards. Fight Night shows brought in substantially less revenue but therefore generally paid higher wage shares.

For example, UFC Live: Vera vs. Jones on March 21, 2010 generated event revenue of $2,992,794 and its fighters were paid a total of $983,500, for an ultimate wage share of 32.9%. Six days later, the UFC 111 PPV event headlined by Georges St. Pierre generated $28,097,645 in event revenue with total fighter pay of $3,760,751, resulting in a much smaller 13.4% wage share. So essentially, the unweighted wage share line above is giving more weight than it should to small events (which tend to have larger wage shares).

But since there’s three years of overlapping data, an adjustment can be made. The UFC’s actual wage shares are known in 2011-2013. Using the highest and lowest discrepancies between the unweighted wage shares and the truth over those three years, a window of the UFC’s wage share can be estimated all the way back to 2005.

The results show that for 11 straight years, the UFC’s wage share with its fighters was remarkably consistent. Fighter compensation as a percentage of event revenues basically hovered around 19-20%. Some of those years are documented fact from the antitrust case while others are estimates using a foundation of the work of expert witnesses in the case.

This stability in UFC wage share wasn’t because the promotion’s revenues were relatively flat over the 11-year period. They climbed from $226 million in 2007 to $609 million in 2015 (both per a 2016 lender presentation) and ultimately to a reported $750 million in 2017.

The two years with abnormally low wage shares were 2005 and 2006. The UFC notoriously rocketed into prominence following the success of The Ultimate Fighter 1 in early 2005 and its incredible Forrest Griffin vs. Stephan Bonnar finale event. The result was exponential UFC revenue growth from a lowly $14 million in 2004 to $48 million in 2005 to $180 million in 2006. So it appears fighter contracts took a couple years to adjust to the company’s explosive growth coming off TUF 1’s success.

Once 2007 hit, fighter compensation in percentage terms remained steady. Using the midpoint of the estimated years, the UFC’s average wage share from 2007 through the first half of 2017 was 19.6%.

A common question this addresses is, “How much do fighters get of that?” Over the course of 11 years and UFC revenue growth from $226 to $750 million, how much did fighters see of the increase? The answer is 19-20%, so long as the new revenues were derived from UFC events.

During that same time frame, the promotion signed a seven-year, $832 million broadcast deal with FOX. How much went to the fighters? 19-20%, from late-2011 through mid-2017. More recently, the UFC landed a 10-year, $175 million sponsorship deal with Crypto.com and signed 14 new international media rights agreements with a 94% average annual increase over prior terms. While these deals were struck after 2017, the available evidence so far suggests 19-20% of those revenues tied to specific events will make their way to the promotion’s fighters. While it’s certainly possible fighter wage share could’ve changed in recent years, a 2016 internal UFC document projected that a somewhat similar metric – fighter costs as a percentage of total revenue – would remain constant from 2016-2020. And there’s also hard data on the first full year of Endeavor’s UFC ownership, where wage share held steady at 19.5%

The consistency of the UFC’s wage shares over more than a decade is separate from the normative question, should the promotion share more of its event revenues with the fighters who play such an important role generating them? The antitrust case will eventually provide a legal answer to this question. The only problem is it’s moving at a snail’s pace, with a motion for class certification still pending after more than four years.

If the judge in the case, U.S. District Judge Richard Boulware of Las Vegas, eventually allows a follow-on lawsuit to move forward covering mid-2017 to the present day, more recent UFC wage shares may eventually be disclosed. Until then, we’re stuck with 11 straight years in a narrow band around 19.6%.