And finally, at UFC Brazil on 1/14, we had the problem of referee inconsistency for the second straight week. This week didnt involve finishes, but involved a Dusty finish in one match, and stand-ups in another.
Erick Silva came out and destroyed Carlo Prater in :29. After Silva knocked Prater down with a knee to the body, he landed 12 punches on the ground, most to the side of the head, and one to the back of the head, before the match was called by referee Mario Yamasaki. However, with everyone expecting that Silva had won, Yamasaki, in the role of Stanley Blackburn or Tommy Young doing a version of the Dusty finish, told ring announcer Bruce Buffer that Silva didnt win, but was instead disqualified for punches to the back of the head.
Joe Rogan, in the ring, called over Yamasaki and they watched the replay. The replay showed one inadvertent punch to the back of the head in the flurry. Something like that is commonplace in finishes, because heads move when punches are thrown and in flurries at the finish these things happen. The general rule is that if an illegal blow, such as a punch behind the head or a head-butt or an accidental illegal knee ends a fight, but is not intentional, it would be ruled a no contest. It also could go to the cards if the bout has gone past a certain point, but that wouldnt be applicable here. But a DQ call would be for an intentional blow, which even if you are going to call the foul, which is virtually never called in this situation, it shouldnt have been a DQ.
Dana White texted horrible to us right after the finish, and went on twitter and at the press conference, while pointing out Yamasaki is a good referee, that he made a bad call. He also paid Silva his win bonus and, like when Jon Jones was disqualified against Matt Hamill, UFC is going to treat it when it comes to booking direction that Silva is coming off a win and on a streak of sub-one-minute wins. He also encouraged Silva to protest the decision.
But since the show was in Brazil, with no athletic commission, that means it falls to the hands of Marc Ratner, the Vice President of Regulatory Affairs for UFC. Ratner acts as the presiding commissioner in places like Brazil and Europe. Ratner was going to review the tape on 1/17. The issue is, I dont know that they can give Silva the win as most would want because Yamasaki said that he did warn Silva, and the punch to the back of the head came after the warning, and even though Prater was done and even had injured his shoulder, Yamasakis stoppage was in his mind calling a DQ, not a stoppage because Prater was unable to defend himself, even though he was not defending himself. So at best it would be ruled a no contest on the intent issue.
Nevada has a provision where, if there is a judgment call regarding an illegal move or something related to the actual finish of the fight, the referee can watch a replay and change his mind. Yamasaki didnt change his call or appear to want to when Rogan showed him the tape, and UFC itself doesnt have that rule in place. Although this might lead to such a thing being changed when UFC regulates its own shows.
Later, in the Belfort vs. Johnson fight, ref Dan Miragliotta ordered two stand-ups after very short periods after Johnson had taken Belfort down. He also ordered a break almost immediately when the two were in a clinch. While I dont buy this for a second, as a fan not knowing anything, it would have appeared that Miragliotta was doing everything he could to facilitate Belfort winning. And given the controversy regarding Johnson, who was expected to be fired over not making weight, and that this was a UFC regulated show, you can see where people would have suspicion. The Rio de Janeiro crowd was quick to boo any type of slowdown in the action, particularly when the Brazilian hero was on his back against an American and little was happening.
The subject of the pay of UFC fighters, which gets heavily debated every week or two on Internet message boards when certain athletic commissions release the pay information at shows, was the subject of an ESPN feature and web site article over the past few days, as well as a Yahoo article.
The investigative series Outside the Lines looked at fighter pay on a show that included an interview with Zuffa CEO Lorenzo Fertitta, that aired on 1/15 on ESPN 2. Even before the piece aired, UFC President Dana White started bad-mouthing it on his twitter, but more claiming UFC is chomping at the bit to discredit it.
Im excited to smash and discredit ESPN and the piece they did!! So pumped, was one of numerous tweets sent out by White while he was in Rio de Janeiro promoting UFC 142.
We wanted to look at what the pay scale is presently, it was not our intent to do the story on how UFC has grown exponentially, noted John Barr, the ESPN reporter who put together the piece. We feel that piece has been done. We paid some lip service to that. The main goal is what these guys are making at a time when the company has its first significant deal with a broadcast network and pay-per-view shows are as profitable as ever, what is the reality of fighters pay, not the top 5-10% of the fighters, but fighters across the board.
The actual piece was about six or seven minutes long, followed by a panel discussion of the topic with Robert Maysey, a lawyer who follows the sport and has attempted to get fighters to work together to garner merchandising deals and perhaps unionizing, former heavyweight champion Ricco Rodriguez, who praised Fertitta but claimed he was blackballed out of UFC by White, and Josh Gross, a reporter for ESPNs web site, who White has probably been more critical of than any reporter with the possible exception of Loretta Hunt.
But there is an inherent problem in the story that Barr readily admits. When covering a major sport, what the athletes earn is a matter of public record due to collective bargaining agreements. Trying to figure out what fighters make, and what UFC makes, is more difficult. UFC is a private company, and while they do release live gate information after most of their shows, that is the extent of financial information the company releases. The big revenue streams, whether it be pay-per-view revenue, television rights fees both foreign and domestic, any merchandising revenue, sponsorship income are all kept private.
And when it comes to fighters salaries, while some athletic commissions do release the base pay numbers, particularly Nevada, which is the companys home base and where they run the most often, many do not.
Plus, most importantly, the vast majority of the money UFC pays fighters is not released. You dont have to look any farther than Alistair Overeem, who defeated Brock Lesnar in the main event of UFCs last show in Las Vegas.
Overeems publicly listed pay for the show was $264,285.71 as base pay, plus he received $121,428.57 as his winning bonus. However, a lawsuit filed against Overeem by Knock Out Investments, the parent company of Golden Glory, Overeems former management, revealed what the Nevada pay sheets dont say and what most are in the dark about.
Overeem received a $1 million signing bonus upon inking his UFC contact, with the money spread over his first three fights, meaning he received another $333,333.33 guaranteed for the Lesnar fight. But for Overeem, and virtually every UFC main event fighter on pay-per-view, the number publicly talked about and the real number arent even close, due to pay-per-view percentages, which vary based on the fighter.
In the interview, Fertitta noted that 29 UFC fighters have such deals where they get a percentage of pay-per-view revenue. In the case of Overeem, he was to receive $2 per buy after Zuffa company pay-per-view revenue for the show topped $500,000, which would be roughly the first 23,000 buys. If the pay-per-view did 800,000 buys, that would be an additional $1,554,000, putting his total pay in excess of $2.2 million.
The problem is that without the lawsuit, people would be thinking Overeem earned $385,714.28 for headlining a major show. His opponent, Lesnar, was listed as earning $400,000 for the show, but the reality is he also had a pay-per-view bonus locked in, and since he was the more established draw, his bonus percentage would likely be significantly higher.
Within the MMA industry, those complaining about fighter pay continually throw out numbers, usually claiming that only 10% of revenue that UFC brings in trickles its way down to the fighters. But that figure is ridiculous. But what the real figure is for the most part is unknown, because virtually every revenue stream, as well as the actual pay most fighters receive, is also unknown.
What we did is reach out to fighters, managers, some folks who have worked for Zuffa, and use that 2010 Standard & Poors report that 75% of revenue comes from pay-per-view and live events, said Barr. We tried to understand all the revenue streams, pay-per-view itself, costs of production, marketing, all of that stuff. Thats one piece of it. Then, what the guys get paid. We know whats reported, but we know about all that off the books money, so you have to piece together many parts.
So you wound up with ranges. Most people come up with a number thats 10%, some say 6-7%, some high-teens. Lorenzo is on the record saying thats ridiculous, and is closer toward what the established leagues pay. I didnt press him on that, but did ask if theyre paying close to 50% and he said, `Yes.
Monte Cox, an agent who has 70 fighters under contract, 16 of who are under contract to Zuffa, said how except for the fighters at the top, the rest are struggling and that you dont negotiate deals with UFC, you take what they offer.
The FTC does have some type of investigation going into Zuffa. The piece said it was an investigation of whether purchasing Strikeforce for $34 million (a dollar figure that Fertitta said on camera for the first time) has led to UFC becoming a monopoly.
Obviously, UFC is not a monopoly, as shown by the different promotions on HDNet, as well as Bellator having television deals. But they control almost every marketable fighter on the North American scene with the exception of a few. It is difficult for a fighter to make a good living outside UFC, although there are exceptions, like Eddie Alvarez, who earns well into the six figures per fight in Bellator. But for those fighters, its impossible for them to be considered the best, no matter how many fights they win. And its difficult for them to even be considered in the rankings, because to be ranked highly you have to beat guys ranked highly as a general rule, almost all of which are under contract to Zuffa.
Fertitta said UFC has paid out about a quarter-billion in fighter salaries since 2005. But that number would not be anywhere close to 50% of revenues. Fertitta said in a Sports Business Journal article a few months back that the company grosses $400 million per year. Standard & Poors has access to their financial information because UFC works on the money of outside bondholders, but only a limited amount gets published. But UFC has been highly profitable from 2006 to the present, with estimates of $76 million in 2006 and a significantly higher profit number in 2010. With PPV falling, the 2011 numbers are likely significantly lower since PPV is the main revenue stream. But those criticizing the numbers have pointed out that $250 million doesnt appear to add to anywhere near 50% of total company revenue over the past six or seven years for a company that probably hit close to or surpassed the $200 million in revenue range by 2006 and has grown significantly almost every year since then. With PPV bonuses being built into more contracts, Fertitta said that pay to fighters has grown at double the rate of the increase in revenue, which means that whatever the percentage was a few years ago, it would be significantly higher now.
The difference between claims UFC pays 8% and 50% is quite the range and the difference between what could be considered gross underpayment and what would be considered fair payment at least based on the standards of major sports. There is no way the number is anywhere close to 8% as noted in our previous attempts at estimates.
In an attempt to use figures based on Zuffas percentage of an 800,000 buy show, which is at best an estimate of how the show did, the $3.1 million live gate, using listed fighter pay, announced bonuses, estimates of unannounced bonuses (admittedly extremely tricky), and percentages of payper-view revenue built into the main eventers contracts, and you get a very rough figure of 28% of revenue off that event going to talent, and given the bonus structure, that estimate is more likely a little low than a little high. However, for the 1/7 Strikeforce show in Las Vegas, that figure could easily have been greater than 50%.
In an attempt by (ESPN reporter Josh) Gross and ESPN to do a hack job on us, we were ready this time!, White posted. We are gonna blast these hacks!
He also wrote, Trust me, I have been part of ESPN hack jobs, thats why I dont do those BS shows and why we filmed it.
ESPN doesnt care about this sport, ESPN hates this sport, they hate this sport, they wont even cover it, they dont tell the great stories about this sport, they dont tell stories about the fighters, do you ever see an in-depth story about great fighters, hell no you dont, said White in a video UFC produced as a counter argument. You see this garbage Outside the Lines.
Theyre dirty. They lie, and they never really give you really all the facts. You cant even watch stuff like this on TV. From now on, thats why I didnt participate in the interview, I refused to participate in the interview, I will never participate in anymore interviews like that, and if I do, I will only do that if we film them filming us.
Its a difficult task to know what is and isnt fair. For one, UFC, as a business, is structured completely differently than the big four team sports, which pay closer to half of total revenue to the athletes. Its structured differently than boxing, where the major names fighters earn significantly more than UFCs biggest draws. Georges St. Pierre recently said that he earns $4 million to $5 million per fight, but that figure likely includes sponsorship revenue. UFC has costs associated with producing and marketing shows, and front office expenses, and international expansion costs that a boxing organization doesnt have.
Plus, the draw in UFC is different than boxing. In boxing, most pay-per-view shows do less than 50,000 buys, but big draws like Manny Pacquiao can do significantly more than 1 million buys, and at a higher price point than a UFC show. Floyd Mayweather vs. Victor Ortiz, for example, grossed $78 million just on pay-per-view revenue, while if UFC 141 was Zuffas biggest show of the year and did 800,000 buys, that would be a gross of closer to $36 million, and Zuffa only gets a percentage in the range of half of that. Between live gate and estimated revenue the fight generates originally to the promoters, Mayweather vs. Ortiz would be $48 million and UFC 141 would be around $21 million. Ortiz received a $2 million guarantee and we dont know what, if any, percentage he may or may not have received. Mayweather received a $25 million guarantee, plus a percentage of all revenue, and is believed to have taken in somewhere near $40 million. Three other fighters on the show earned six figures, most notably Erik Morales at $350,000. But four received less than $10,000 including two prelim fighters who each received $1,500. There are also site fees, HBO replay revenues, and tons of other revenues involved. The general rule for a big boxing event is 70% goes to the fighters, and in this case, it may have been more. But both sports are structured differently.
For the 11/12 Pacquiao vs. Marquez fight in Las Vegas, not including PPV cuts (the show did 1.41 million PPV buys, the largest number for any U.S. PPV event since UFC 100), Marquez received $5 million and Pacquiao received $6 million, while Tim Bradley received $1,025,000 and Joel Casamayor received $100,000. Of the 16 fighters on the show, six were paid less than $10,000 with a low of $1,200.
Virtually every UFC show will do at least 200,000 buys, but the top ceiling for the biggest events isnt as high, because UFC big events still dont get nearly the level of mainstream media coverage of a Pacquiao fight. While the main event most often is the key, the main eventers dont draw as much additional revenue as the two big boxing stars who make tens of millions. Plus, as a general rule, UFC pays undercard fighters better, and markets the shows around the top several matches on a card as opposed to just one match.
The closest business model to UFC is that of World Wrestling Entertainment, which is believed to pay in the range of 13-15% of its total revenue to its performers. And thats not perfect either because while pro wrestling historically has been about main event wrestlers drawing money, it is no more of a touring brand. Big matches and main event names do make a difference to ratings, PPV and to a small degree, house shows, but not nearly at the level main event UFC fighters do. While some will argue WWE is performance art and not a real athletic competition and thus the performers dont deserve as much, the dollars WWE derives from its performers is every bit as green as those which UFC derives.
Like UFC, but unlike major sports franchises, both WWE and UFC employ hundreds of full-time front office workers, so comparing the percentage they pay to, say, an NFL team, with far less employees, isnt necessarily a fair comparison. But on the other hand, like UFC, WWE has been a very profitable business built off the bodies of its performers, for the past several years.
From 2001 to 2004, UFC lost tens of millions of dollars. Fertitta talked of losing $10-12 million in the first year and a similar amount in successive years until getting the television deal. If you are talking about what the fighters were earning then, which is a lot less than now, it was significantly more than the company could afford and remain in business for the long-term. UFC pays more than other organizations, but almost every major MMA company existing collapsed due to financial issues, often paying fighters more than the companies derived in revenue.
In fact, UFC itself before 2005 nearly collapsed under the weight of the debt. But in 2005, the company turned the corner, thanks to a television deal with Spike, and has been running with significantly high EBITDA based on regular Standard & Poors Credit reports since that time. But there are untold costs, including those of international expansion, and the cost of getting legalized nationwide and internationally that no other professional sport has had to deal with.
Still, anyone who has been around fighting at any level knows the stories of the fighters who arent big stars, in UFC, or other organizations, who struggle by for little money, sleep on friends couches and even go into debt trying to pursue a fighting career.
The reality is that nobody wanted to talk for attribution, said Barr. We talked to everyone. We talked to guys who made millions of dollars, guys in between, and guys at the bottom end of the pay scale.