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Evidence in Cung Le lawsuit against UFC shows company paid 20 percent of revenue to fighters

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Cung Le
Esther Lin, MMA Fighting

The questions of exactly how much the UFC pays to its fighters was answered in court hearings on Monday in Las Vegas.

The figures came out in Judge Franklin Boulware’s hearing regarding the lawsuit by Cung Le and other former UFC fighters against the company, charging that UFC was acting as a monopoly promotion that used its power and marketplace control to keep fighter pay down.

This is a key week as Boulware, after the hearings, is expected to make a ruling that would greatly impact the proceedings if the case was to go forward.

UFC fighters received 26 percent of company gross revenue in 2007, a number that steadily declined until 2011, where it remained steady at between 19 and 20 percent from testimony by plantiff witness Dr. Hal Singer, according to Forbes’ Paul Gift.

The figure is slightly higher than the 13 to 14 percent that was estimated at the time of the company’s sale in 2016, and far higher than a lot of media speculation of six to eight percent from people who had used the announced salary figures provided by the few commissions that release them as the basis of their figuring.

The number staying steady as far as a percentage goes, would mean fairly steady growth because UFC revenue since 2011 has grown significantly most years. This year, due to the ESPN deals for television and streaming rights, as well as pay-per-view, the fixed revenues should have shown substantial growth.

In all, the UFC paid approximately $626 million to its fighters between September 1, 2011, and August 31, 2017, which hovered close to 20 percent each year. In addition, there was evidence listed that the UFC forecasted $980 million in revenue for 2020 and estimated fighters compensation at $196 million, or 20 percent.

The arguments were always that the major league sports like the NFL, NBA, MLB and NHL paid closer to 50 percent. But those sports also have had unions and collective bargaining dating back decades, and prior to that, the players received nowhere near that percentage.

What also came out in the hearings in coverage from Gift and John Nash of Bloody Elbow was that Strikeforce paid fighters 63.0 percent of revenue, while for Bellator, which has been the No. 2 promotion in the U.S. for the past several years, that figure is 44.7 percent.

But with the UFC’s total revenue dwarfing that of other promotions, for the leading competitor—which Strikeforce was and Bellator still is—they have to pay a higher percentage to attract any top-level talent. And the reality is that Strikeforce ended up not surviving and selling to the UFC with that level of economic commitments to fighters.

The hearing was about certifying the class of fighters. Boulware said in court that he doesn’t see how the case can proceed if he fails to do so at the end of the hearing.

”I can’t see how this case will proceed,” Boulware said if he doesn’t rule in favor of the plaintiffs and certify the class, based on a Forbes article. The article noted that the UFC brought in eight attorneys, Le’s side brought in 12, Bellator had two and there were two other attorneys on the phone representing Top Rank promotions, since part of the plaintiffs argument is that the competition within boxing has led to an environment where the top fighters in that sport are paid significantly higher than UFC pays its top fighters.

The competition not being as fierce for top stars as boxing, a sport Zuffa is looking to break into shortly, is certainly part of that equation, but the businesses are very different. To the public, boxing is boxing, while to the public, MMA is not MMA, it’s UFC and non-UFC, a huge distinction. Indeed, even in the dark ages of 2001, when the Fertittas and Dana White first entered the business, they didn’t start on their own, and instead paid $2 million for what Lorenzo Fertitta said at the time were three letters: UFC. Since that time, an alphabet soup of companies have come and gone, with none really ever able to even closely challenge the UFC for economic supremacy.

The boxing mindset proved not to play out, since the old mentality was that he who controls the real heavyweight champion has the power. It led to Fedor Emelianenko making deal after deal when he was considered the top heavyweight in the world, but while he became a big star who could sell tickets and get television viewers to a degree when he was the acknowledged best, he was never a guy who could make a company competitive with UFC.

It’s a tough argument for the plaintiffs because the current landscape clearly has competitive promotions with television and streaming deals giving them exposure—Bellator with Paramount and a $33 million-per-year deal with DAZN, Combate Americas on Univision and DAZN, the Professional Fighters League on ESPN 2 and ESPN+, and ONE Championship on TNT and Bleacher Report.

Being owned by Paramount and the DAZN deal have solidified Bellator, but almost all promotions in the past that have tried to compete, such as Bodog, Elite XC, IFL, Pride, Strikeforce and Affliction, all with significant backers, drowned in a sea of red ink or were looking to be sold and the UFC made deals to pick them up and remove them from the playing field as competition.

In addition, Bellator and ONE have bid for UFC fighters when they became free agents, and signed them. UFC’s strategy does seem completely different from when Gilbert Melendez was a free agent and Bellator had interest, and as a legitimate contender for the lightweight title at the time, the UFC matched the offer and wouldn’t let him go. With the lawsuit in play, the UFC did not attempt to match offers for the likes of Ryan Bader, a top light heavyweight who ended up as a two-division dominant champion in Bellator. They also made a deal which led to the departure of Demetrious Johnson to ONE. Johnson was one of the greatest champions in UFC history. He lost his flyweight title on a close decision, and had he stayed, his rematch with Henry Cejudo would have been the biggest flyweight fight in company history.

Singer argued that in a truly competitive environment that UFC would be paying 47.3 percent of revenue to fighters. By that standard, UFC should have paid fighters $1,471,000,000 over that six-year period.