One can imagine it was a painful experience for the Ultimate Fighting Championship’s 145-pound titleholder Alexander Volkanovski to work as the color commentator for countryman George Kambosos’s recent boxing match at Marvel Stadium.
Not because of Kambosos’s poor showing or the fact that he was commenting on boxing instead of his own sport of mixed martial arts. No, what must have been tiresome for Volkanovski was hearing again and again that George was set to receive “ten million dollars” for his title defense — an amount that is likely more than Volkanovski’s entire career earnings. This is despite the fact that Alexander, who will attempt to defend his UFC title this weekend, is the vastly more accomplished fighter of the two. His mistake? Choosing a career in mixed martial arts, a sport singularly defined by a promotional monopoly.
There are plenty of similarities between mixed martial arts fighter Alexander Volkanovski and boxer George Kambosos, whose championship fights are set to take place a mere four weeks’ apart from one another – Kambosos fought on June 5, and Volkanovski is set to defend his UFC title on the 2nd of July.
Both are Australian, were born and raised in New South Wales, and are of Australian-Greek heritage. Both fight in the lower weight classes, Kambosos in the 135 lb (61kg) division and Volkanovski in the 145 lbs (66kg) division. Both risk serious injury and possibly death in their chosen professions. And, until Kambosos’ recent loss to Devin Haney, both were viewed by the general public as at the top of their respective sports and weight classes: Volkanovski as the current Ultimate Fighting Championship world’s featherweight title-holder, while Kambosos was the lightweight champion in boxing, holding three of the four major sanctioning organization’s belts.
Where these similarities fall apart though is when one looks at what they are each paid to practice their craft.
According to Top Rank’s Bob Arum, who was one of the promoters for the Haney-Kambosos event, the Australian received $7 million (approximately AU$10 million) in compensation for the United States broadcast rights, the gate from more than 40,000 spectators at Marvel Stadium, sponsors, and other sources of revenue. Not included in this amount was Kambosos’s share of the residential and commercial pay-per-view sales. Reportedly 50,000 homes paid AU$59.95 to watch the match along with hundreds of bars that paid much more for the right to screen it. Together this would have translated into approximately two million dollars more in Kambosos’ pocket, putting his total earning at around $9 million or AU$13 million.
In comparison, Volkanovski, who is set to defend his featherweight title on July 2, 2022 in a trilogy bout opposite former champion Max Holloway, makes much, much less than his pugilistic counterpart.
As a UFC champion, Volkanovski could be expected to have a contract that paid him around US$500,000 guaranteed “to show” along with pay-per-view points, so long as he is defending a title. The standard UFC pay-per-view (PPV) agreement, for those that have them, is typically structured so that the athlete receives a cascading sum depending on how well the event sells:
- One dollar ($1.00) for each pay-per-view buy between 200,000 buys and 400,000 buys;
- Two dollars ($2.00) for each pay-per-view buy between 400,000 buys and 600,000 buys; and
- Two dollars and Fifty Cents ($2.50) for each pay-per- view buy over 600,000 buys.
A low selling PPV would thus pay nothing, while an extremely successful one — such as UFC 251, where Volkanovski co-headlined along side a welterweight title fight — could translate to a seven-figure bonus. In most cases though, the total PPV buys for an event are under half a million. Thus, as Amanda Hooton of the Sydney Morning Herald wrote in her recent feature on the UFC champion, “someone at [Volkanovski’s] level might be expected to earn between $500,000 and $1 million a fight.”
Volkanovski, like all other UFC fighters, does not receive a cut of the gate, nor a piece of the commercial PPV. His only sponsorship income for a match is derived from the UFC’s apparel deal with Venum, which pays him a token amount ($42,000) in “compliance pay” for wearing its uniform during fight week. The upside for fighters – their share of the business – is exclusively for residential pay-per-views. Bars, theaters and other commercial venues are excluded when determining a fighters’ bonus. The pay-per-views that are included are also commonly limited to places where the price is the equivalent of at least $40. This would mean sales in the United States and Canada are always included when determining a UFC champion’s bonus. Conversely, Australian sales will only be included if the Australian Dollar doesn’t fall below 73% the value of an American dollar, which it currently is.
For fighters on cards that particularly appeal to Australians, this can be costly. If the dollars remain at $1.43AUD to $1USD then the fighters with PPV bonuses on UFC 276 might not receive any income in respect to Australian purchases. The exclusion of 100,000 buys from Australia for an event that sold, say, 600,000 in the US and Canada, could represent the sudden loss of a quarter million dollars for fighters like Volkanovski; or roughly a quarter of all of his income that night.
Why is it then that Kambosos made so much more off his title defense than Volkanovski does defending his UFC belt?
It is not because boxing is more popular or generates more money. UFC broadcast rights, pay-per-view sales, sponsorships money, and ticket sales generate more than $1 billion a year for the company, which holds an average of 42 events per calendar year.
Volkanovski’s next event can be expected to generate millions at the gate at T-Mobile Arena in Las Vegas, millions more from sponsors, international broadcasters, and a guaranteed eight figure fee from ESPN for the US residential PPV rights. All told, it is very likely UFC 276 will generate more than Kambosos versus Haney did.
No, the reason why boxers like Kambosos make more, is because boxers get a much higher share of the revenue generated by the events they compete in. Which is to say that in boxing, more of the proceeds go to the men and women in the ring throwing leather than to the paper-pushing suits who manage, promote and broadcast the event.
This isn’t speculation. Documents that the UFC was required to disclose through antitrust litigation in the United States showed that that the organization pays approximately 17% of revenues to its athletes. This compares with the roughly 28% of revenues which Australian Football League players receive, the 50% of revenues paid out to athletes in American ‘stick and ball’ sports (NFL, MLB and NBA) and the astronomic sums commanded by top boxers. Case in point: Top Rank, Haney’s promoter for his fight with Kambosos, recently reported that it paid on average around 70% of its revenues to the boxers on its events. Thus, if they fought on identically performing cards, a boxer could expect to earn in excess of three times what his UFC peer would for theirs.
Why would boxers get a higher share of the revenue than UFC fighters when the sports are so similar? Both involve two individuals competing in hand-to-hand combat in front of a paying audience, be it attending live events or watching on pay-per-view. The only major difference between the two is that one takes place in a ring and the other an eight-sided cage, and that the average sports fan sometimes confuses “that cage fighting stuff” with the contrived world of professional wrestling.
Rather, the explanation for why a boxer like Kambosos can make so much more than fellow champion, Volkanovski can be found in how the two sports are structured: a difference that greatly impacts the leverage that their respective athletes when dealing with the aforementioned suits.
The sport of mixed martial arts is dominated by one entity, the UFC, which was founded in 1993 and has an estimated value of between $4 and $10 billion. It is estimated that 90% of all the revenue generated by professional MMA bouts pours into the UFC’s coffers, and they have an equal share of the top fighters under long-term, exclusive contracts.
UFC champions are recognized as the number one fighter in each of their weight classes, and those titles are owned and controlled by the UFC and (to a lesser extent) the fighter that holds them. Thus, to become recognized as the best in the world, like Volkanovski has done, a fighter has to sign an agreement with the UFC that tilts heavily in the promoter’s favor. Without agreeing to their terms, the fighter will never get an opportunity to fight the other top fighters under exclusive UFC agreements, nor will the UFC ever grant them the right to fight for their championship. And thus, they will be forced to linger in obscurity, denied the chance to prove their capabilities in their sport of choice.
Conversely, agreeing to the UFC’s terms in order to get the opportunity means that even after winning said title they will be locked into a long-term deal that continues to give the UFC leverage in negotiations. Terms in the UFC’s boilerplate contract include prohibitions on the fighter wearing their own sponsors, prohibitions on competing in non-MMA competition (e.g. boxing, professional wrestling) without the UFC’s permission, provisions giving the UFC the right to exploit the fighters’ likeness in perpetuity, wide-ranging IP rights granted in the UFC’s exclusive favor and various “tolling” provisions which allow the UFC to extend the contract in certain common circumstances (e.g. the fighter gets injured).
By contrast, the “labor market” in boxing in 2022 is much more heavily geared in favor of its top athletes. To be sure, it wasn’t always this way. Corruption and exploitative conduct from promoters were hallmarks of the sweet science throughout much of the twentieth century, and a long list of pugilistic icons found themselves on the receiving end — including Muhammad Ali, Larry Holmes and Mike Tyson. However, Federal legislation which was passed at the turn of the Century, aptly named the Muhammad Ali Boxing Reform Act changed this paradigm and, vitally, introduced antitrust provisions which gave boxers more bargaining power with promoters and created a more competitive market landscape.
Unlike MMA, no one promoter dominates the sport in boxing, nor do any of the promoters own their titles. Instead, the titles and the ratings they use to determine the top challengers are controlled by independent sanctioning organizations. These organizations are often viewed with disdain, for unlike in MMA where the UFC champion is viewed as the recognized world champion, their presence means there are often multiple champions who can make a claim for that title. What it also means is that no promoter can withhold access to world championship opportunities as a means to coerce a boxer into signing an agreement in the promoter’s favor.
Kambosos and Volkanovski offer clear examples of the difference these different structures make. Both had been professional fighters for a similar duration with similar records (8 years and a 20-1 record for Alexander, 7 years and a 19-0 record for George) before receiving a shot at the title. But whereas Alexander had to petition the UFC for the opportunity to even fight for their promotion and again for the opportunity to fight for their title, Kambosos was free to choose his own promoter with the knowledge that a single promoter did not control access to a belt.
As former UFC welterweight champion Carlos Newton once described the difference between the two sports: “in boxing, promoters compete for boxers, who in turn compete for titles, while in MMA, fighters compete for promoters who own titles.”
Thus, when Volkanovski was given a chance to fight for a UFC title there would be little in the way of negotiations. If he wanted the opportunity, he would have to fight for it on the date and at the venue of the UFC’s choosing. His pay for the championship bout ($250,000) had also been determined well ahead of time: when he signed a long-term contract with the UFC earlier in his career, before he was a top-ranked contender.
Meanwhile, once Kambosos had won enough fights against other top challengers, he was made the mandatory contender for the International Boxing Federation (IBF) – one of the four major sanctioning organizations – lightweight title. The champion at the time, Teofimo Lopez, was now required to defend against Kambosos or surrender the championship. There were no requirements on the Australian’s side to sign over his future rights to Lopez’s promoter in order to get his title opportunity.
Kambosos would go on to earn $1.23 million for his title shot opposite Lopez. This high number was largely attributable to the fact that there was a tender process through which promoters could make purse bids for the right to promote the fight. This is something that Volkanovski would never have access to as a UFC champion, as his exclusive promoter is the UFC. (Kambosos’s $1.23 million purse did not include the $420,000 he earned when the original purse bid winner forfeited their deposit for failing to hold the event within the required time period.)
Even if some eccentric billionaire – say Andrew Forrest – wanted to pay Volkanovski a $10 million flat purse to compete in a stadium show in Melbourne or Sydney: Alex would be contractually obliged to decline. The only way he could take up that offer is if he fought out his UFC contract (a five year sunset provision make waiting it out very difficult) but champions who have attempted this escape have frequently faced retaliatory action from the promotion.
The lack of market competition in the MMA industry, and the low share of revenue that lands in fighters’ pockets, is a situation that the UFC has deliberately cultivated over the past two decades – suppressing fighter-led efforts to start a fighter’s union and to extend boxing’s Ali Act to the mixed martial arts industry. Multiple class action lawsuit have also been brought by former UFC fighters against the promotion, claiming it has engaged in anticompetitive conduct and exercises illegal monopoly power, however the progress of these claims has been slow and their outcomes uncertain.
In the interim, the UFC’s executives and shareholders are paying themselves massive salaries and bonuses, whilst selling their top athletes short to the tune of hundreds of millions of dollars per year.
The unfairness of it all is unlikely to have escaped Volkanovski, who joined the Main Event commentary team for the Kambosos-Haney clash and heard all about how much his counterpart was expected to make for what turned out to be a solitary title defense. What’s less clear if there’s anything that Alexander “The Great” or his management team can do about it before his time at the top of the sport is over.
John S. Nash is a regular contributor to Bloody Elbow. Jacob Debets is a Melbourne based lawyer and writer.
Together, they are working on a book about the UFC, expected to come out in 2023. Its working title is “Just Bleed: The Untold Story of the Ultimate Fighting Champion’s Rise from Banned to Billion Dollar Bloodsport”.