MMA at a Crossroads
The Current State of MMA
2018 may go down as the most significant year in the history of MMA since 2005. Last year saw an unprecedented increase in the financial leverage of individual fighters. When fighters who aren’t major draws in the UFC can reportedly generate 8 figure salaries in competing organizations, it’s clear that the old rules no longer apply. This is great for fighters in the short term, but if the UFC doesn't adapt quickly, it could be bad for everyone in the long run. Make no mistake, I believe fighters deserve and have earned more than they are currently paid. In fact, reforming the fighter pay structure is a critical part of the solution. However, this also could be a prelude to a major problem. If the UFC doesn't adapt quickly, I fear MMA going down the same path that made boxing go from the biggest sport in the United States to a niche draw over the course of a few decades.
The DECLINE OF BOXING
I’ll start by stating that the reasons for the decline of boxing have already been outlined by experts far more knowledgeable than me. It’s clear that there are many reasons for it’s decline: Corruption, Fragmentation, and a lack of charismatic heavyweights among many others. Fragmentation is the issue facing MMA today due to the changing landscape of fighter compensation, and it’s what I’m going to focus on.
What happens if you Google “Current Best Heavyweight Boxer”? Well, Google will struggle a little bit, and it’s because the answer isn’t clear. There are currently 4 heavyweight champions holding major belts in boxing. None of them have fought each other, so it’s difficult to say who is the best. It gets much worse though. Try Googling “Current boxing champions”, and get ready to look at a spreadsheet. Boxing has 17 different weight classes spread out across 4 different sanctioning bodies and Ring magazine. In addition to this you often have regular, interim, and super champions. All said, there around 70 champions in boxing. I won’t bother counting the exact number because it will likely be out of date by the time I publish this anyway. The cognitive load of trying to understand and process this is part of what makes boxing so difficult for casual fans to follow. Ignoring the Mayweathers, Golovkins, and Canelos of the world, it’s extremely difficult to explain to someone why they should get excited to watch a certain fighter get into the ring.
The main contributor to this problem is the number of different sanctioning bodies that exist. The WBA, WBC, IBF, and WBO all have numerous extremely talented fighters. Not only does this create a laundry list of champions, but it also makes it difficult for the best boxers to ever fight each other. Imagine an NFL where the NFC and AFC champions never played each other, rather the season just ended and there was no Super Bowl. Imagine college football without playoffs or even bowl games. That’s where boxing is today. Yes, we occasionally get a super fight, but they’re so few and far between that it fails to build momentum around the sport as a whole.
Unfortunately, this also ensures that the best fighters aren’t promoted properly. Again, ignore the Mayweather and Pacquiaos who have transcended the sport. When was the last time you saw a major promotional effort for an up and coming title challenger in boxing? Who is the last boxer that a casual fan base has watched rise through the ranks of the sport? Because promotions are so fragmented there isn't a consolidated effort to build hype around future stars. This doesn’t just hurt up and coming boxers, but it hurts the sport as a whole. There is no unified branding, messaging, and promotional effort. Functionally, boxing promotions are weaker than the sum of their parts.
In short, fragmentation in boxing hurts the sport because:
There are too many champions
The top fighters rarely fight each other
There isn’t a unified promotional effort behind the top fighters
Fragmentation in MMA
Unfortunately, we’re starting to see some big steps in this same direction for MMA today. 2018 is the first year since the days of PrideFC that you could argue there are multiple champions in non-UFC promotions better than their UFC counterparts:
Gegard Mousasi was on a 5 fight win streak and ranked #2 by the UFC when he left the organization. He has been dominant since joining Bellator and would be a tough matchup for current UFC champion Robert Whittaker
Demetrious Johnson dominiated the UFC Flyweight division for 6 years before surrendering a close decision to Henry Cejudo. He is arguably still the best at 125 lbs
Rory MacDonald has seemingly taken a step backwards in recent years, but still remains one of the only people to own a win over current UFC welterweight champion Tyron Woodley
There is every indication that this problem is going to get worse, not better. As stated previously, the reports all suggest that OneFC has given both Demetrius Johnson and Eddie Alvarez 8 figure deals as part of their contracts to switch promotions. These are particularly staggering numbers when you consider that Alvarez and Johnson, while ultra-talented, are not major draws for PPV buys. Consider for this for a minute, an 8 figure contract is enough draw virtually every fighter away from the UFC. The only exception might be Connor McGregor.
The new OneFC deals have drawn considerable attention because they’ve drawn some significant talent away from the UFC, but consider how much more disruptive it could have been. With that kind of money, OneFC could have worked out a deal with Daniel Cormier, Jon Jones, and Robert Whitaker. They would have the ability to gut the UFC of it’s major champions. If that had happened, and if it does in fact happen, the MMA landscape will start to look a lot more like boxing. The best fighters won’t fight each other, there will be almost no unified promotional effort, and the sport will gradually become inaccessible to the casual audience.
The Future of MMA
The scenarios outlined above are, of course, the worst case scenario. The major question that remains to be seen is whether or not OneFCs gigantic contracts remain financially viable. OneFC is a large company with presumably some major financial backing, but the accounting “bottom line” is what will always drive business. So the sustainability question ultimately comes down to this: Will Johnson and Alvarez ultimately bring in enough new viewership to the promotion to justify 8 figure contracts?
Again, Johnson and Alvarez are both great fighters, but ultimately the answer to the above question I believe will be ‘no’. Johnson and Alvarez simply aren’t big draws. However, that’s not to say it wouldn’t be a good decision for other, larger names such as a Cormier or a Jones. Who is to say that one of them wouldn’t get an 8 figure opportunity when their current contract is up?
The good news for the UFC is they have an opportunity to react with a new business strategy. The window for them to adjust is shrinking though, and unless the response is swift and decisive, the UFC will lose their market share, and we will head down a path that is bad for the sport. The strategy they must adopt moving forward is simple: Start paying fighters a salary that is balanced based on how big of a draw they are.
The UFC needs to come up with a method, a formula, or some algorithm for determining how much viewership individual fighters will draw. I would love to speculate on what that would look like, but I feel like that could be a large article in of itself. The point is that you start to pay fighters an amount of money that is much more closely aligned to the amount of dollars they pull into the company. Fighters like McGregor, Nurmagomedov, and Diaz make enormous salaries right now. They rightfully should, because they bring top dollar into the company. Even making what they’re making, they’re very profitable for the company. However, the logic needs to be extended down the ladder to the lower rankings. Fighters such as Israel Adesanya should be making a lot more than $59k to show like he did at UFC 230, because I guarantee he’s pulling a lot more money than that into the company. He’s a guy that had a lot of hype around before he even had his first MMA fight.
This a tough pill to swallow for the UFC, who has been enjoying an incredibly profitable decade. They’re going to have to work with much more thin margins than they have in the past. Unfortunately, if the UFC wants to retain their hegemony in the long term, they’re going to have to live with this short term pain. They need to reform their pay structure in a way that more accurately reflects the drawing power of fighters, and they need to do it now. This isn’t just important for them, it’s critical for the future of the sport.