The UFC owners at Endeavor reported another strong quarter to start 2022 with revenues up once again, but the publicly traded company continues to face questions about fighter pay and overall athlete compensation compared to other sports leagues around the world.
On a Thursday earnings call, Endeavor executives revealed that the company’s sports properties, which include the UFC and Pro Bull Riding, saw a five-percent increase year over year, with $296. 7 million in revenue for the quarter — up $13. 2 million from the same time in 2021. Endeavor also touted that every UFC pay-per-view in the first quarter sold out its venues, in addition to two record-breaking events for live attendance at UFC Fight Night cards with the back-to-back shows in March in London and Columbus, Ohio.
Endeavor’s CFO Jason Lublin asked about fighter pay in light of a strong report and healthy profit margins.
” We agree that there have been many comparisons to team sports like the NFL or NBA. But we don’t believe this is the best comparison to the UFC,” Lublin stated. “We think the right comparison is to other individual sports, such as the PGA tour, F1, NASCAR, and ATP.
” If you compare the salaries of these athletes to revenue, and how they are paid relative to those leagues’ revenues, then it is right on par with what UFC pays their athlete compensation .”
Thanks to documents made available during the ongoing class-action lawsuit brought against the UFC by several former athletes, it’s public knowledge that revenue paid out to the UFC’s fighters has typically averaged between 16 to 20 percent.
Leagues such as the NFL or NBA pay out approximately 50 percent of the revenue to the athletes, which is a figure that’s usually negotiated during collective bargaining with unions representing the players.
No such unions exist in combat sports, but Endeavor has repeatedly defended overall fighter pay, especially when looking at the growth of the UFC over the past 20 plus years.
“I would also like to point out that the fighter [compensation] CAGR (compound annual growth rate) since 2005 has been 26 percent, while the revenue CAGR for that period has been 21 percent,” Lublin said. “So the fighter pay CAGR has been outpacing the CAGR of revenue for the entire company, and that’s before we talk about other ancillary ways that our fighters are earning through — sponsorships and other consumer product deals. We believe that we can invest in fighters with no risk to our margins .”
CAGR refers to the return rate required to allow an investment’s balance to increase from its starting balance to its end balance.
While the figures Lublin released makes it appear that fighter pay has significantly outgrown overall revenue, those numbers can be deceiving, especially when looking at the overall picture dating back to 2005, which is before the UFC had ever signed a major broadcast deal.
Following partnerships with Spike TV and FOX Sports, the UFC inked a multi-year deal with ESPN worth over $1. 5 billion while also moving pay-per-view broadcasts to the company’s streaming service at ESPN+, which has also increased overall revenue.
As far as comparisons to other organizations mentioned by Lublin, PGA Tour commissioner Jay Monahan sent a memo to players in late 2021 with a statement that said 55 percent of the tour’s money was going into prize money paid out to the players. This is similar to what happens in leagues such as the NFL and NBA.
Meanwhile, the ATP tennis tour sees events typically pay out between 20 to 30 percent of the revenue back to the players.
Lublin reacts to the question about fighter pay. This is after Endeavor CEO Ari Emanuel was faced with a similar situation during the previous earnings call. He was asked how he would respond to critiques from prominent influencers like Jake Paul who have repeatedly criticized the UFC’s pay practices.
” I’m not commenting,” Emanuel stated in March. “I think we’ve done very well as it relates to the pay for the fighters.”
