Duck or Jab: Unraveling the UFC’s Fighter Compensation Controversy

Author: Robert Liu, Graphics: Nina Tagliabue

The BRB Bottomline

The UFC has experienced drastic growth since its founding in 1993. Not only has the organization cemented itself as the premier mixed martial arts promotion, but the enterprise has also developed into one of the most successful sports leagues in the globe. Armed with an abundance of financial resources, the organization has done an excellent job in expanding its global stronghold and negotiating promising business deals. However, the organization’s financial success has been largely overshadowed by its unethical compensation of fighters, a controversy that has sparked immense public outrage. To resolve this scandal and repair its public image, it is crucial for the UFC to recognize its past injustices and implement a reformed fighter compensation structure. In doing so, the company will restore its currently fractured reputation and properly position itself for sustainable long-term success.

Introduction

In 1993, WOW Promotions and Semaphore Entertainment Group created and co-produced the Ultimate Fighting Championship (UFC), a televised winner-takes-all tournament featuring fighters of different disciplines, including kickboxing, karate, boxing, and Brazilian jiu-jitsu. Unbeknownst to its founders, this inaugural tournament would lead to the development of the world’s premier mixed martial arts (MMA) promotion. Under the leadership of president Dana White, the UFC has grown into a multi-billion dollar enterprise that hosts annual events across the globe. Nevertheless, in spite of its commercial success, the UFC has continuously undercompensated its fighters, an ethical controversy that has cast a shadow over what has otherwise been a golden age for the organization. In spite of the UFC’s attempts to justify low fighter salaries, it is crucial to recognize the need for a reformed compensation system, which will benefit both fighters and promoters in the long run.

Breaking Down the UFC’s Compensation Structure

The UFC’s current compensation structure is designed to take advantage of its fighters. The majority of UFC fighters are compensated in three primary ways: base pay, bonuses, and sponsorships and brand deals. The UFC exploits its fighters on all three levels of compensation, setting one-sided policies that control and severely limit fighters’ potential earnings. As a result of these tactics, many UFC athletes, primarily younger fighters and mid-level veterans, are struggling to make ends meet, living paycheck to paycheck.

In order to fight in the UFC, athletes are required to sign an exclusive contract with the organization, which specifies the number of times a fighter will fight and their base pay per fight. In many situations, up-and-coming fighters, most of whom are desperate to compete, are coerced by the UFC into signing long-term contracts that span the course of multiple years (up to five years) and numerous fights (on average, two to three fights per year). These contracts typically include unfavorable terms, such as inopportune fight timelines, clauses that restrict fighter mobility, and most importantly, extremely low base pays. In fact, the vast majority of UFC fighters, including most newly signed athletes, sign contracts with base salaries between $10,000 to $30,000 per fight. This figure is staggeringly low, especially accounting for fighting expenses, such as training camp costs, travel expenses, and state or international taxes, which can cost fighters over $10,000 per fight. Due to low base salaries and high expenses, many athletes are left with little to no disposable income after fighting in an event. To make matters worse, even if fighters are successful inside the Octagon, they will not receive an elevated base pay until their contracts expire. As such, many fighters are financially unstable for long periods of time, sometimes during their most successful fighting years, as a result of one erroneous business decision.

In addition to base pay, fighters also have the opportunity to earn win bonuses – additional paychecks that are only awarded to the winning fighters – and performance bonuses – which are $50,000 bonuses assigned to fighters that produce the most exciting and entertaining performances. While win bonuses, which typically equate to base salaries, are dependent on the type of contract signed, performance bonuses are determined by internal decision-makers. At first glance, it may seem that the UFC’s bonus system helps to increase fighter compensation and thus positively affects fighters. However, in actuality, the UFC utilizes its bonus system as a negotiating tool as well as a means to enforce its own policies. For example, win bonuses are often used to incentivize fighters to accept less than favorable terms to fight, such as low base salaries. Because fighters often perceive win bonuses as guaranteed money (despite this not necessarily being true), the UFC will commonly include win bonus clauses as a justification for low base pay. On a similar note, performance bonuses are used by the organization to ensure that athletes adhere to the status quo and oblige to company policies, no matter how outrageous they are. In 2015, current UFC Bantamweight Champion, Aljamain Sterling, failed to receive numerous performance bonuses, despite “posting impressive stoppages,” due to his “contentious contract dispute with the UFC,” in which he publicly criticized the organization for its deceptive fighter compensation strategies. Numerous other fighters have also suffered the same fate as Sterling, losing out on performance bonuses due to the slightest of infractions outside of the ring. In essence, the UFC bonus system is structured like a weapon rather than a reward.

Outside of fighting, another source of income for UFC fighters is sponsorships and brand deals. In 2021, the UFC signed a deal with Venum, a martial arts apparel company, in which all UFC fighters would receive an additional payout for exclusively wearing Venum equipment and gear during fights. Sponsorship payouts would be determined by the number of fights that a fighter has fought and range from $4,000 (1 to 3 fights) to $42,000 (UFC Champions). While the UFC benefits from the Venum deal because it is able to maintain a cleaner brand image with more professional-looking uniforms, the Venum deal actually affects UFC fighters negatively. Due to the exclusivity component of the Venum deal, UFC fighters no longer have the opportunity to capitalize on their own in-ring attire sponsorships, many of which pay double to triple the Venum payout. In signing the Venum deal and enforcing this company-wide policy, the UFC has once again eliminated an opportunity for fighters to maximize their earnings, a recurrent theme regarding the business and compensation structure of the company.

The UFC’s corporate structure is a reflection of its organizational mentality: financial success at the expense of its employees. Rather than maintaining a mutually beneficial relationship with its employees, the UFC has elected to exploit its fighters, treating them like disposable assets. As a result of its actions, the UFC has stirred up a storm of backlash and criticism, damaging the brand’s image and reputation.

Justifications for Low Fighter Compensation

The most common arguments made by the UFC (and its supporters) against attempts to reform the organization’s compensation structure pertain to a fighter’s “freedom of choice.” Their thesis is that no matter the UFC’s corporate structure or operating practices, fighters are the ones that decide to sign contracts with the UFC; if fighters truly believe that they are being undercompensated, they can always elect to fight for other organizations. In most industries, this is a fair argument given the ease of moving between various companies. However, mixed martial arts varies from most conventional industries in that one organization, the UFC, has established a near monopoly. Thus, in reality, fighters do not necessarily possess a freedom of choice. Rather, they are bound to the UFC out of necessity.

When Dana White, the president and public face of the UFC, is criticized for the organization’s low fighter compensation, his response is commonly along the lines of the following: “Look, if you want to be with us, we’d love to have you. If you don’t want to be with us, no problem. It’s all good.” However, White’s response drastically oversimplifies the issue at hand and is thereby an inaccurate encapsulation of the situation. In actuality, the process of leaving the UFC and working for an alternative company is not as black and white as White makes it appear. To begin, fighters who have signed with the UFC are contractually bound to the organization. This means that until their contracts expire – typically when fighters have completed the required number of events – fighters have no choice but to compete in the UFC. Furthermore, contrary to White’s quote, which implies that fighters can leave if they are unhappy with the organization, the UFC will not set fighters free of their contracts prior to their expiration dates. In fact, as documented in numerous cases, the UFC’s negotiating strategy during contract disputes is shamefully simple: a flat-out refusal to even negotiate.

Additionally, White and other supporters of the UFC have popularized the misconception that fighters have alternative means of employment. While twenty years ago, numerous promotions such as Pride Fighting Championship, World Extreme Cagefighting (WEC), and Strikeforce existed alongside the UFC, the market is vastly different in the present day. In its current state, the mixed martials industry is dominated by the UFC, which not only controls 90% of the market share, but also acquired each of the aforementioned companies – Pride, WEC, and Strikeforce. While a few other promotions exist outside of the UFC, these brands do not have the financial resources, organizational stability, and global reach that the UFC possesses. As such, the UFC’s competitors cannot afford to pay fighters as much as the UFC does, due to a lack of working capital. Thus, professional mixed martial arts athletes typically have one option for employment: the UFC.

As a result of its market dominance, the UFC is able to effectively maintain its current compensation structure. With virtually no competitors, the UFC can afford to offer its athletes meager compensation packages without the fear of losing its fighters. The UFC fighter compensation controversy is undeniably complex. However, the UFC’s attempts to justify poor fighter compensation are regularly rooted in false narratives, such as the concept of “freedom of choice.”

The Injustice of UFC Fighter Compensation: An Ethical Analysis

At the core of this issue is a conflict between two key stakeholders: UFC fighters and UFC promoters. While most UFC fighters are advocates for increased fighter pay, UFC promoters, such as Dana White and other internal decision-makers, remain steadfast in their belief that current fighters’ salaries are sufficient. In order to navigate conflicting stakeholder interests and determine the most optimal solution for the following dilemma, it is essential to analyze the situation under two ethical frameworks: utilitarianism and deontology.

Utilitarianism, coined by John Stuart Mill, is the ethical concept in which decision-makers strive to achieve the greatest amount of good for the greatest number of people. Under utilitarianism, users conduct a systematic comparison of costs and benefits to all affected parties, known as a “cost-benefit analysis.” A cost-benefit analysis of the following situation reveals that improved fighter compensation would result in the greatest net positive for the greatest number of individuals and thus is the most ethical decision. Under this outcome, UFC fighters, the majority stakeholder group, would receive improved compensation packages, additional income that can help to cover training costs and other expenses, and allow fighters to fully dedicate themselves to their training without having to worry about financial instability. Additionally, an increase in compensation would also help to justify the dangerous health risks involved with being a professional mixed martial arts athlete, especially considering the fact that the UFC does not provide long-term medical coverage for retired fighters. Even more, external stakeholder groups, such as UFC viewers and consumers who drive the organization’s revenue generation, would benefit from increased fighter compensation. Under a revised compensation system, fighters, who can undergo training without worrying about financial difficulties, would be able to perform more productively inside the Octagon, much to the approval of their fans. While promoters, who tend to hyper-fixate on short-term profit gains, may be adversely affected, this tradeoff is necessary to make because it results in a majority net positive.

Unlike utilitarianism, deontology focuses on individual intentions and motive rather than consequences. Under this moral philosophy, certain behaviors are inherently right or wrong, regardless of whether or not they maximize utility. Deontology features multiple guiding principles, two of which – beneficence and reparation – are especially pertinent to the current analysis. Beneficence refers to behavior that entails helping others without expecting anything in return. This principle would clearly dictate that the UFC increase fighter compensation; by increasing fighter wages, the UFC would be assisting its fighters, many of whom desperately need the additional income. Likewise, under reparation (behavior that entails compensating individuals that you have harmed), the most logical course of action for the UFC would be to increase fighter compensation. As detailed above, the organization has a long history of fighter mistreatment, ranging from its manipulative negotiation strategies to its oppressive compensation policies. In order to make amends for its past wrongdoings, the UFC should revamp its compensation system and improve fighter salaries, ensuring the financial stability of future MMA fighters. Altogether, under a deontological paradigm, the most ethical decision is to increase fighter pay, regardless of the consequences of either alternative.

Through analyzing the following predicament under a utilitarian and deontological microscope, the most optimal and ethical solution is to revamp the current fighter compensation structure and increase fighter pay. Nevertheless, remodeling the UFC compensation system raises numerous questions. Challenges include balancing fighter and promoter interests, maintaining the organization’s long-term wellbeing, and, most noticeably, kickstarting the reformation process.

Reforming the UFC Compensation System: Potential Solutions

In spite of fighter outcry and public disapproval, the UFC has adamantly refused to adjust its base compensation policies. The UFC and supporters of the current compensation system claim that increasing UFC base pay benchmarks would not only cause the promotion to be financially vulnerable, but also force the organization to downsize its roster, resulting in the unemployment of numerous fighters. In many ways, their claims are not unwarranted. If, for example, the UFC implemented a minimum base pay of $50,000, there is a high likelihood that the promotion would be forced to fire unestablished fighters and cut back on other expenses in order to maintain financial stability. Nevertheless, there are multiple solutions to reforming the UFC compensation system that do not involve modifying fighters’ base salaries but would still allow fighters to maximize their potential earnings.

The first solution would be for the UFC to cover fight-related expenses. As previously mentioned, the UFC does not currently foot the bill for fight-related expense fees such as training camp costs, coaching fees, and medical expenses. However, by paying fighters’ pre-fight preparation costs, the organization would relieve fighters, particularly up-and-coming athletes, of immense financial burden, allowing them to prepare for fights more adequately. Furthermore, in implementing this recommendation, the UFC would also be able to justify fighters’ base salaries, compensation that is heavily diluted by pre-fight training expenses. Some concerns about this policy, such as fighters overspending on training expenses or elongating their preparation timelines, are completely legitimate. To mitigate these concerns, the UFC should issue baseline stipend checks to cover training expenses, thereby avoiding any “superfluous fees.”

Another option would be for the UFC to revoke its Venum partnership agreement and allow fighters to capitalize on their personal in-ring attire sponsorships. As previously mentioned, the Venum deal features an exclusivity component, which prevents fighters from promoting other sponsors on their fight uniforms during events. Not only does the Venum deal stifle fighters’ potential incomes, but it also prevents fighters from controlling their own sponsorship agendas, an important secondary stream of revenue for UFC athletes. If the Venum partnership ceased to exist, fighters would be able to truly profit off of their name, image, and likeness, increasing their publicity and bolstering their personal finances. According to the UFC, the primary reason for its partnership with Venum is to maintain a cleaner, more streamlined brand image. In order to balance fighter and promoter interests, a plausible alternative would be for the UFC to allow fighters to pursue their own attire sponsorships but cap the number of brands that appear on a fighter’s uniform so that fighters do not appear as promotional billboards in the Octagon.
Over the past decade, proponents for increased fighter compensation have proposed a plethora of different recommendations and solutions, most of which are relatively lopsided and short-sighted, such as unionization and $50,000 win bonuses. However, the aforementioned solutions not only balance the short-term interests of UFC fighters and promoters but they also have the potential to trigger tremendous long-term growth within the UFC.

Conclusion

Take-Home Points

Under the leadership of president Dana White, the UFC has grown into a multi-billion dollar enterprise that hosts annual events across the globe.
The UFC’s corporate structure is a reflection of its organizational mentality: financial success at the expense of its employees. Rather than maintaining a mutually beneficial relationship with its employees, the UFC has elected to exploit its fighters, treating them like disposable assets.
Through analyzing the following predicament under a utilitarian and deontological microscope, the most optimal and ethical solution is to revamp the current fighter compensation structure and increase fighter pay.
There are multiple solutions to reforming the UFC compensation system, such as for the UFC to cover fight-related expenses or revoke its Venum partnership agreement, that do not involve modifying fighters’ base salaries but would still allow fighters to maximize their potential earnings.
To resolve this scandal and repair its public image, it is crucial for the UFC to recognize its past injustices and implement a reformed fighter compensation structure.