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UFC 257: Conor McGregor Purse Revealed. Maybe?

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Another Conor McGregor fight which means another round of McGregor pay speculation.  

UFC 229: Khabib v McGregor Photo by Christian Petersen/Zuffa LLC/Zuffa LLC via Getty Images

Both the Independent and Forbes have reported on the purses for tonight’s main event. According to the Independent yesterday, McGregor “has a disclosed purse of $5m plus a share of the PPV,” which “could bolster his overall earnings for the fight to around $20m.”

Meanwhile, his opponent “Poirier has a disclosed purse of $1million – already the biggest payday of his career – plus a share of the pay-per-view revenue.” The Independent notes though that “[t]he Diamond’s PPV share is not expected to be substantial.”

Forbes today also reported that McGregor’s listed purse is $5 million “but he should pocket at least $20 million more from his share of pay-per-view revenue.” This is slightly larger amount for the PPV than what the Independent said. Forbes also reports that Poirier will be making $1 million plus a cut of the PPV.

While most of these numbers strike don’t strike me as very outlandish, I do have questions regarding their authenticity, The Independent refers to them as “disclosed purses,” but disclosed by whom and where? Normally disclosed refer to the purse amounts reported by the state athletic commissions, and only refers to the portion of the purse that is reported to them. Since there is no athletic commission revealing this purse info who is disclosing it?

We know that reports on McGregor’s earnings in the past have been greatly inflated. When McGregor made Forbes’s list of highest paid athletes in 2017, they estimated that his pay from his two previous MMA fights - UFC 202 and UFC 205 - to have been $27 million combined. We now know, thanks to unsealed documents in the antitrust lawsuit, that he was paid almost half that amount by the UFC for those two bouts.

Now, after a string of major PPV successes and a mega blockbuster boxing match versus Floyd Mayweather, it seems almost certain that he is earning a lot more today there’s also plenty to suggest that whatever he is getting paid is not so large as to alter the UFC’s business model.

We know, thanks to Moody’s reports earlier this year, that the UFC had a debt-to-EBITDA ratio of 6.7x for the year 2019, and that this improved to 6.4x after Q1 of 2020. In layman terms, this means the UFC’s EBITDA was approximately $20 million higher in Q1 of 2020, the same quarter that McGregor last fought, than what the UFC’s quarterly average was in 2019.

We also know that the UFC’s cash balance managed to increase from $151 million at the end of 2019 to $205 million by May 31, 2020, even while over a month’s worth of events were canceled due to the Covid Pandemic and $196 million was still distributed to equity holders.

One would think that if McGregor’s pay was more equitably split with his promoter then the UFC would not be seeing the earnings they have been. Instead the UFC is still meeting their earlier projects and seeing EBITDA’s of more than 40%.

What that suggest to me is that the UFC’s model has not been altered for McGregor. This does not mean McGregor isn’t making more or does not have a better deal than other fighters, but only that a larger share of the fighter’s split on his events is being paid to him. Where in the past the UFC might be willing to book multiple fighters with a PPV bonus on his cards (as they did with UFC 205 where, in addition to McGregor’s opponent Eddie Alvarez, both Tyron Woodley and Joanna Jedrzejczyk also received PPV bonuses) now that is exclusively for McGregor and possibly his opponent.

Thus, while it seems fairly obvious that McGregor has broken barriers with regards to how much MMA fighters can earn, it seems much less obvious as to wether or not he has altered the UFC’s business practices.