With no actual evidence of what profit the UFC makes each year I don't think you can even mention it. All we (fans/outsiders) see is the buy rates and fighter salaries and think the UFC is making money hand over fist.
Originally Posted by Tyler Dirten
We have no idea on the actual corporate costs, leases on office buildings (which they seem to be putting all over the world inorder to grow the sport) employees to work in those building, travel costs for promotion, insurance costs on every single fighter, not to mention the costs of actually producing an event.
Ive heard that the ppv distributor takes 50% right off the top (I could very well be wrong though), the cost to rent out the venue, tv production staff, setup/teardown staff, etc.
If you assume the UFC has maybe, 1000 employees worlwide, each making $40,000 on average (general admins probably less and tv production/setup crews significantly more) you're looking at $40,000,000 for staff alone each year. And that doesn't include fighter salaries.
I'd love to see fighters paid more, but until we know EXACTLY what kind of profits the UFC sees people should really stop assuming DW and the Fertitas are milking the fighters and bleeding them dry.
Your conservative numbers do not even factor in costs at all though... Add in what each individual cable company and the PPV company itself take from each buy your numbers are dropping drastically right there. Then add in costs to transmit and broadcast on top of that. Then add in the costs of equipment, logistics, production staffing, fight staff, arena rental, marketing, revenue sharing with the top fighters, insurance, commission fees, taxes and so on.
Originally Posted by Tyler Dirten
He is right when he says that it is pathetic that the likes of Arianny, Brittney, Rogan or Buffer receive more money than he does.
Who the fuck are them to get more money than professional fighters that train hard everyday??
Arianny and Brittney should get 10,000 a year for that job. They have the easiest job ever!
It is not that hard to walk around the octagon maybe 15 times per night holding a card that says "Round 2". Anyone can do that. Why they get a lot of money for doing that??
Let me clarify....
Originally Posted by Rise
Because you make some VERY good points (as did the gentleman who posted above you) concerning my comments.
It's true... I was speaking exclusively to the PROFIT I see the UFC garnering... without accounting for operating costs, etc.
I should have been more precise... because I was NOT trying to imply that the UFC doesn't have MASSIVE cost outlays in order to put on the events they do. Because they do. MASSIVE!
As was pointed out... employees need to be paid in every facet of the production... from venue set up, to corporate paper pushers, the UFC has a large staff and a massive amount of overhead.
To say that an outside observer CAN'T make an educated estimate about how much money the UFC is pulling in... well... that's just ridiculous! Of course we can!
Let's just look at the evidence...
Dana White himself stated recently that the UFC is valued at over 3 BILLION DOLLARS. To have a market valuation of that size means the UFC MUST be generating revenue in the hundreds of millions of dollars annually. With the potential for growth.
Look at Dana himself... with his collection of Ferraris (I think I spelled that wrong!?) and his exhorbitant tipping... that is EVIDENCE of what he is now worth... millions and millions of dollars. And that money comes from his owning a TEN PERCENT stake in Zuffa.
Again... EVIDENCE of what kind of PROFIT the UFC generates.
Basic math can give you an idea of what a PPV generates. But yes... you are right... ALL of that money doesn't go to the UFC. But let's say that just one QUARTER of the money goes to the UFC (a ridiculously low figure... but for the sake of argument... let's use it.)
Sticking with our $50/PPV and 250,000 buys/PPV rate (again, ridiculously LOW since most events cost $60 and 250,000 buys is at the bottom of their sales rates) that means that PPV sales generate a gross figure of $12.5 million.
Let's say ONE PPV/Month (the absolute MINIMUM these days!)... that means 12.5 x 12 = $150 Million/Year
UFC's quarter = approximately $37 million.
Add on AT LEAST another 20 - 40 million dollars for the live gates (which are typically between 2 and 4 million bucks) and you start to see that the $40 000 000 number you suggested for employee pay (a reasonable figure I would agree) is really not that much.
Considering we haven't even factored in ALL of the many revenue streams the UFC now has.
You know how much a commercial costs on Fox Sports 1 during prime time on a Saturday night? That's a LOT of advertising dollars... coming in pretty much every other week these days.
See all those logos during the shows? They don't come for free. Just step in to the Harley Davidson Checkpoint and ask them. :)
And that's just scratching the surface!
You know what video games sales generate these days? With half a million units sold at $60 a pop???
How about the Dolls, the BobbleHeads, the Sports equipment, the home videos, the coffee mugs, ball caps, clothing, etc. etc. ETC!!!!
My point (my long winded point!) is that any casual observer with a basic understanding of Math can easily figure out that the UFC is pulling in gargantuan profits. Exhorbitant, mega profits.
It's obvious. It's well documented. And we are talking about HUNDREDS of MILLIONS of dollars...
So... when I see a guy making 60 and 60... (and that's closer to the HIGH end of fighter pay!)... then YES
I think it is more than reasonable for me, as an outside observer, to say that the UFC is paying their fighters far too little.
But that depends on how a person thinks profits should be split. For me... it's 50/50.
Half of all profits (once everyone has been paid, all overhead paid, etc)... half of all PROFITS should go to the owners (That would be Lorenzo and Frank, Dana, and the Arab investor(s) who purchased 10% a few years back when the Fertittas needed to bail out their European casinos) and HALF should go to the fighters.
I think your assumption that a casual observer can make any kind of accurate assumptions about a private companies financials is incorrect.
Originally Posted by Tyler Dirten
There is no way to quantify the UFC's profit. Valuation isn't necessarily related to revenue - it also takes into account the value of fighter contracts, broadcast rights, video library, trademarks, etc...
Yes, Dana seems to be making a ton of money, but there is no way to determine the source of that revenue. It may be that his personal brand is worth enough that it eclipses what he makes from the UFC (the UFC ran in the red for a long time, that stake was worthless then).
You assume that the UFC profits from the advertising during a broadcast, there is some truth to that, but the percentage is something like 1% - 10%.
You mention the video game being $60 a copy, but fail to mention that the I.P. holder's typically make 1%-3% on their properties. The publisher makes the majority of the money, not the developer, and not the IP holder.
You mention PPV numbers, what's the COST to put on the PPV. That has to be factored into your calculations also (The gate at the arena usually covers the fighter's pay).
Also, as mentioned before, there is the general cost of doing business (employees, properties, etc...).
I'm not saying that the UFC isn't turning a profit, I just don't believe that it is as profitable as you are assuming.
And... I would argue that it is FARRRRRRRRRRRR more profitable than YOU are assuming.
Originally Posted by lordpyro
But you are correct that neither of us has access to finances that can verify which of us is correct.
What I will suggest (again) though... is that what evidence there IS would suggest that I am right.
You make a LOT of great points... but I still have to disagree with you.
To ME... it is blatantly obvious that the UFC turns a profit of several hundred million dollars a year. Every year. And I'd say that although you are correct... and the UFC was at one point tens of millions of dollars in the red... that the profits began to accrue around 2006... and that today the profits can be counted in the hundreds of millions of dollars yearly.
That to me is obvious. But! If you disagree I understand!
And perhaps you are correct.
But if you are... I would suggest someone is seriously mismanaging funds at the UFC offices.
With the cost of their shows (which, realistically is NOT that much! They rent a venue, they install audio visual equipment that they use EVERYWHERE, and they employ a staff to set up/take down/handle technical aspects, etc.) compared to the amount of cash they pull in... Although we disagree on the specifics... I assume we can BOTH agree that a typical PPV nets the UFC tens of millions of dollars (live gate/ppv buys/sponsorships and advertising/etc) I just don't see HOW the UFC isn't turning a profit in the Hundreds of Millions of dollars annually.
That's AFTER paying fighters at the current rate.
I won't go on and on about this... because I imagine people are getting bored with this. (I kinda am too!)
But agree with me or not... I would argue with you to infinity that, like most corporations, the UFC are turning a disgustingly huge profit on the backs of the fighters who, while they pay them MUCH more than I've ever made!, they do NOT pay a FAIR PERCENTAGE OF THE COMPANY'S PROFITS.
That is my opinion... and I'm sticking to it!
But thank you for the debate. Everyone who replied... you guys raised a lot of great points. Very cool. :)
If you have no access to there financial numbers then how can you make an "educated" guess? Its just a guess, or better yet, an opinion. Which means absolutely nothing.
Nate is an idiot for signing a deal that he apparently hates. His teammate Gilbert did it the right way, hold out for a better deal and be prepared to walk out if you dont get it. That is capitalism/free market at its finest.
Anyone that thinks that $60K to show & $60k to win isnt good money is tripping in my opinion. That is $120K in one night! Lets say you fight 4 times and go 2 -2; thats $360K for the year. That doesnt include bonus money or sponsorship money. That is not bad money in my opinion.
Finish your contract and get a new deal; if you dont like the deal go look for a new one. Pretty fuckin simple.
Not bad money in your opinion? Your not a world class fighter, Nate Diaz is, so there's a slight difference there. He's won TUF, fought for the title, and is constantly beating top 10 fighters, and finishing a good amount of them. Your just some regular person that will probably never see 120k in a year, so of course you think that is some great amount of money to make in one night (not to mention he has to WIN or he gets half of that), but Nate Diaz and many other fighters have bigger dreams than you and have been working towards them for a long time.
I also think it's hilarious when people measure the UFC's success and DW's bank account by his Ferraris. Those are most likely leased by the UFC and used as a business expense with a portion of the payments being written off and DW probably just calls them his own because he gets to drive them. Any moderately sensible business owner would go that route for the tax credit.
I'm certainly not saying he DOESN't own them, because he may, but it's a ridiculously stupid move to flat out buy them when you have an option like that. Even if they are his cars, in his name, what are the odds he bought them with cash? They are most likely still leased or financed and not a true reflection of the money he's making. Have you never seen someone over spend on a car simply for the status and have trouble making the payments?
Aww, you went and made it personal!
Originally Posted by dbader08