Dustin Poirier and Conor McGregor face off during the UFC 257 weigh-in at Etihad Arena in Abu Dhabi, United Arab Emirates, on Jan. 22, 2021.Jeff Bottari/USA TODAY Sports via Reuters
About 25 years ago, running back Ricky Williams signed the worst contract in modern sports history.
At the time, Williams – who was a bit like a Deadhead who’d been raised in a gym – was the hottest thing going in the NFL. Instead of going with the old-boy network, Williams hired a rapper, Master P, to handle his business affairs.
Williams had an admirable, if deeply unfashionable, sense that he should earn whatever he was paid. He negotiated a deal that surrendered guaranteed money in exchange for potentially lucrative performance-based bonuses down the road.
Except those bonuses ranged from unlikely (41 or more receptions a year) to ridiculous (12 or more receiving touchdowns). No running back had even caught a dozen TD passes in a year.
Williams missed most of his targets and became a figure of fun in sports. All he had to do was make the same sort of deal everyone else had. But oh no. He had to get creative. Like all monolithic institutions, sports loathes creativity.
Williams still made a lot more money than you or I, but his greatest contribution to pro culture was definitively killing off an already unpopular idea – that athletes should be paid based on performance.
Instead, they are paid based on past performance. Or, for those who don’t have comparable experience, on potential performance. The better and longer your CV, the higher your pay. Whether you end up earning it is beside the point.
This way of doing things has become so entrenched that we no longer think about it. Your team will have one guy making $10-million who was injured half the year and spent the rest of it stinking up the joint, and another making $800,000 who’s running roughshod through the league and that’s just how it is. The $800,000 guy will get his eventually (though not if someone folds up his leg before he can make it to free agency).
It’s an unfair system held together by the same urge that compels us to buy lottery tickets.
Ownership is happy to let the players chop up the money any way they want as long as the total salary payout does not exceed 50 per cent of revenue. That number is consistent across the big four leagues, even in baseball where there is no salary cap. But there is an extreme outlier.
This week, UFC failed to stop a class-action suit filed against it in Nevada by hundreds of former employees.
The suit accuses UFC of fixing it so that it was the only mixed-martial-arts game in town, and then paying its fighters as little as possible. In most parts of America this sort of thing is called ‘doing business’, but we’ll see how it goes.
UFC had been enjoying a remarkable run of luck. Its revenue graph looks like an alpine landscape. It is being merged with professional wrestling to form a sporting superpower. And the best news of all – it isn’t paying for it.
As part of the evidentiary process, UFC opened its books. People had assumed the fighters were paid like boxers – which is to say, that the stars were making vast amounts.
They aren’t. They’re paid more like third-string point guards. The Bloody Elbow blog relayed some of the numbers.
At the height of his powers, when every one of his news conferences produced terabytes of content, Conor McGregor was making so-so money. He was paid US$5.6-million for headlining UFC 202 in 2016. He got US$6.8-million for topping another card a few months later.
All the big names came in around this level. Ronda Rousey topped out at just under US$5-million when she was arguably the hottest athlete going. Quebec’s Georges St-Pierre was making around US$4-million a fight when UFC was pushing him as the best pound-for-pound combat athlete on the planet.
It’s a lot, but it’s peanuts compared to what UFC was making. Joe Pompliano points out in his Huddle Up newsletter that McGregor was sometimes paid less than 10 per cent of the revenue generated by his fights. At a big boxing match, that number is typically 70 per cent. No wonder McGregor was so anxious to be embarrassed by Floyd Mayweather Jr. in a boxing ring.
The presumed reason for UFC’s rise is the growing appetite for bloodsport. Now we know it’s also the accounting.
Most sports operate like service businesses in terms of labour cost, which makes sense because the players are client-facing.
I’m coming over to your place to watch an MLS game? Er, no thanks.
I’m coming over to your house to watch Lionel Messi? I’ll be there in an hour.
UFC has client-facing employees, but operates like a manufacturing business – labour costs are much lower as a percentage of revenue. The fighters are arguing that that’s unfair. I would argue that that’s tough.
Only so many people can score 30 points in an NBA game. A lot of people can get jacked in the gym, talk a bunch of crap and pound the hell out of someone. We can argue about the skill involved in locking up an arm bar, but whatever it is, it’s less than throwing a 98 mile-an-hour fastball with good command. I base this on observation – a lot of people have done the former thing, and only a few of the latter.
A lower skill barrier plus a dearth of competitors equals an environment in which you are paid based on what you do, not what you have done. That’s why they call it prize fighting and not salary fighting. And if you win consistently, you’re still making 50 to 100 times the salary of a guy who works outside in winter. My outrage-o-meter is not exactly tipping into the red zone.
Whatever UFC is doing, it’s connecting. Boxing is essentially the same sport and it has to beg people to take an interest. A more attractive pay packet is not a spur to growth in that instance.
The likeliest outcome of the UFC case is a deal cut to avoid trial. That would cost the league a ton – hundreds of millions – but it’s money it can afford.
What it can’t afford is to lose is its corporate advantage. UFC is nowhere close in size to siblings such as the Premier League or the NFL, but the way its business is structured suggests that sort of growth is not impossible. If it can keep the cut tilted toward itself in this way, it may even be likely.