MMA vs Boxing Finances: Why can’t Jon Jones make as much as Deontay Wilder?

During Jon Jones’s recent impasse with the UFC — “recent” being the last twelve months — we have heard on multiple occasions how Jones is asking for Deontay Wilder money in order to fight Francis Ngannou, who is now the newly crowned heavyweight champion.

“I’ll quote him and what he had said to my lawyer. He told my lawyer he wants what Deontay Wilder was paid,” UFC President Dana White told members of the media last May, an amount that he also described as “an obscene amount of money.” And what was Wilder paid? “I think it was $30 million,” said White, referring to the purse he was supposedly guaranteed for his rematch with Tyson Fury.

White never elaborated as to why he thought this was an obscene amount to pay Jones.

Jones later tweeted out that he was currently making $5+ million per fight for the UFC.

It’s worth noting that very few have said the same thing in regards to Wilder having earned that much. The thought that $30 million is obscene seems based more on which combat sport is being discussed, than the amount itself.

Both types of prizefighting are sold almost exactly the same way: as an event showcasing a fight between two combatants, and sold to the public via live event tickets, pay-per-view or broadcast television. But in boxing, it is an accepted practice for the athletes to earn 10s of millions of dollars (or more), while in MMA, that is viewed as an oddity.

The simplest explanation as to why this is the case is that there is no “UFC” in boxing. There is nothing even remotely comparable.

Parity within boxing promoters vs UFC’s dominance

The closest conceivable UFC equivalent would be if during the 1990s, Don King and Bob Arum had merged their two promotions into one super promotion, then preceded to acquire Main Event Promotions, Ten Goose Boxing, and all the talent signed to them. They’d also have to follow it up by buying up the WBA, WBO, and IBF sanctioning organizations, unifying their titles together with the Ring Magazine title. To cap it off, this entire “Top-King Promotions” entity would have to be purchased by HBO Boxing.

There is no hyperbole in this example. Only an entity that operated simultaneously as a promoter, sanctioning organization, and broadcaster — and was the dominant entity in the sport in each of those fields — could replicate the UFC’s position in MMA. It’s a position that gives them tremendous leverage when negotiating with fighters.

If a fighter wants to be recognized as the best in the world, they will have to sign with the UFC since all the universally recognized “best in the world” are already signed to exclusive contracts with them. And they can only do that if they agree to the terms the UFC sets. If not, they will find themselves fighting lower ranked and lesser known fighters in other promotions, while receiving much less attention from the media and fans.

If they want the chance to fight for a title, then they have to agree to whatever stipulations the UFC requires, otherwise the opportunity will go to someone else. And since, as a general rule, fights involving champions sell more than fights not involving champions, and fighters who are recognized as champions tend to thus be bigger draws, it often makes financial sense to concede to these demands. Therefore, the UFC promotes the biggest fights, makes the most money off promoting those fights, and has the resources to pay more than any other promoter, while at the same time paying a much lower share than they would have had to otherwise.

The situation in boxing is obviously much different.

A few years back, Kurt Emhoff counted up the number of boxers listed on the Transnational Boxing Boards as champions or top 10 contenders that were under contract with each of the major boxing entities. PBC easily had the largest share, and that still was only 22% of the total number. Almost the exact inverse is found with the UFC.

The UFC has, according to the Fight Matrix rankings, 80% of the top 10 fighters in all the men’s division they promote, 90% of the top 5, as well as 100% of the number one ranked fighters in each of those divisions. In boxing, the talent is distributed much more widely amongst a large number of promoters.

This market concentration is not limited just to the top fighters, and it extends to revenue as well. According to filings in the Le v Zuffa antrust case, “UFC is the largest promoter of MMA events, with some 90% of the market,” while their biggest rivals in the US during the class period – Bellator, Strikeforce, and the WSOF – held a combined 2% to 9% of the North American market. No one in boxing has anything close to this kind of market dominance.

One only has to look at broadcast and PPV revenues in the US to see the difference between the two sports’ markets. Starting in 2019, ESPN has paid the UFC around $150 million a year for the broadcast rights and another $150 a year for the streaming rights to their events on ESPN+. They also signed a separate deal that paid them a minimum of $200 million annually and made ESPN+ the exclusive distributor of their PPV events.

In comparison, Bellator MMA, the second biggest promotion in mixed martial arts, had an agreement with DAZN the last few years that paid them approximately $40 million a year. Behind them, the PFL has a deal with ESPN that is thought to pay around $10 million a year, while ONE Championship has an agreement with B/R Live and TNT that pays them $5 million a year. Unlike the UFC, none of these other MMA promoters had any relevant revenue from PPV in North America.

Boxing meanwhile, sees an almost identical amount of revenue from US televisions, but without any one promoter making anywhere close to what the UFC does. In 2019, DAZN had budgeted some $225 million that year for Matchroom and Golden Boy, while ESPN was paying Top Rank $90 million a year for their events. Meanwhile, FOX and Showtime had budgeted around $60 mill each for the PBC series of cards. In addition, PBC and Top Rank also sold PPVs (more so PBC than Top Rank) that generated an extra $60 million to $70 million in 2019.

Thus, while both sports had close to the same amount of revenue from American viewers, in MMA, the UFC has 90 percent of the market, while in boxing none of the big three boxing tribes — the East Asia, Eurasia, and Oceania of the sport — had less than 20 percent of the market or more than 45 percent. They also operated with the expectations that this could change drastically year-to-year, depending on whether or not blockbuster events were held.

Sanctioning bodies and independent titles

This competitive market in boxing extends to their titles as well. In boxing — originally because of tradition and now because of Federal regulation — promoters do not own their titles. Instead, sanctioning organizations rate boxers, make determination of who is a legitimate contender, declare mandatory challengers, and authorize title defenses. While promoters (and the boxers and their management) for the most part get to determine who their boxers will fight, they have to do so in a system where the wrong choice of opponent will result in their boxer losing his rating or even find themselves stripped of their title if it doesn’t match a sanctioning body’s criteria.

This isn’t to say that promoters don’t have any influence over the sanctioning bodies, but they do not have complete control of them, unlike in MMA where the promoters get to sanction their own title bouts. No promoter in boxing holds a monopoly over the major sanctioning organizations. Amongst the champions and rated contenders for each of the Alphabet titles can be found names from every one of the major boxing promoters.

A boxer can therefore sign with a variety of promoters and still have a chance to compete for the same title as long as he can be matched up with rated boxers that propel him up the rankings. Eventually he may be declared a “mandatory challenger” by a sanctioning organization and the current champion will be compelled to either drop the title or defend it against him.

Unlike in MMA, the challenger in boxing does not have to agree to whatever is offered in order to get the bout. Instead a failure to come to terms by the two sides results in a “purse bid,” allowing anyone to put in a bid for the right to promote the fight. This mechanism prevents the champion’s side from presenting a take-it-or-leave-it offer to the challenger.

Federal protections, and the Muhammad Ali Boxing Reform Act

Finally, this competitive market is partially enshrined by Federal legislation with the Muhammad Ali Reform Boxing Act. Signed into law in 2000, it has been used sparingly since. Federal authorities and state athletic commissions have never enforced the law in a court, while a few boxers have used the Act’s right of private action to challenge a promoter, manager, or sanctioning body, often settling without a ruling.

While there has been a definitive lack of enforcement and under-utilization, that does not mean it has had no impact. Promoters like Lou DiBella and Leon Margules, and attorneys like Kurt Emhoff and Patrick English have all told me that the Ali Act still influences decision making, as the Federal protections make compliance on certain practices standard.

That doesn’t mean such compliance is as thorough as the authors of the Act probably intended though. For example, the Ali Act requires promoters to give a copy of the complete and full contract they have with a boxer to the state athletic commission, something almost no promoter does and which almost every commission refuses to enforce.

Another section of the Ali Act that is not enforced completely requires a promoter to disclose all compensation he or she has received from a bout that a fighter is participating in. Since most cases, the promoter is receiving money only for the main event, the promoter only has to reveal the revenues to these two boxers. In addition, the Act isn’t specific as to when these disclosures have to be made, so that often a promoter will share the information after the fight has taken place, where it is too late for the boxer to use for negotiations.

Even though promoters have managed to find workarounds over the years to these disclosure requirements, the fact remains that boxers and their management are much better informed about the finances of their events than their MMA compatriots are. So opaque has been the UFC’s business that many fighters and their managers were just as surprised by the unsealed documents in the UFC antitrust case these last few years as the fans were. Years of disclosures in boxing though have given boxers and their representatives a much better grasp of the potential revenues for a match. That some kind of disclosure is expected has also allowed boxers with more pull to carve out contractual provisions that require even greater divulgence for themselves.

One particular section of the Act that we typically see compliance with is the restrictions on the use of coercive contracts. Coercive contracts are defined as contracts where in order for a boxer to get a match with another promoter’s boxer, they have to agree to sign a long term contract or options with that other promoter. The Ali Act limits these to one year max, unless the bout is a mandatory under a sanctioning organization rules, in which case there can be no requirements for future rights.

Finally, perhaps the most successful regulations in the Ali Act has been the prohibition on compensation from a promoter to an employee of a sanctioning organization. This one sentence has apparently kept any boxing promotion from creating their own titles.

While there has never been a court ruling that a promoter cannot have their own titles under the Ali Act, most seem to be operating under the impression that this is how it should be interpreted. When Congressional hearings where held to discuss expanding the Ali Act to include MMA fighters, all the parties that testified seemed to have the impression that it would forbid it. And when rumors were floating around that the PBC was planning on having their own titles, then Association of Boxing Commissions President Tim Luekenhoff sent a letter to the Attorney General’s office, detailing how this would be a violation of the Ali Act:

One of the express purposes of the Muhammad Ali Act was to regulate “the sanctioning organizations which have proliferated in the boxing industry” which “have not established credible and objective criteria to rate professional boxers and operate with virtually no industry or public oversight. PL 106-210 section 2, May 26, 2000, 114 Stat. 321.

However, it is obvious that the PBC is following the model used by MMA promoters which are not covered by the Muhammad Ali Act, to wit, having their own “in house” champions.

Managers working with the PBC have publicly that this is the model, and reportedly title belts are being made.

15 U.S.C. 6308 (c) prohibits any “officer or employee of a sanctioning organization” from receiving “any compensation, gifts, or benefit, directly or indirectly from a promoter, boxer or manager. Here, just as with the UFC or Bellator the promoter is is the sanctioning organization. Obviously things of benefit are being granted.

While very few Ali Act cases have been brought to court since it was enacted — and there is plenty of debate as to how much protection it really affords individual boxers, especially when authorities refuse to enforce it — there is also evidence that its existence has still been successful at promoting competition and preventing monopolization, both major objectives of the bill. As explained in the Senate Committee Report:

Historically, promoters in the industry have required an exclusive long term promotional contract with a boxing challenger as a condition precedent to permitting a bout against another boxer that the promoter has under contract. The Committee believes, and hearing witnesses and industry members strongly concur, that this tactic is the key contracting practice that has been used by promoters to gain undue control over boxers and championship titles, to the clear detriment of the sport. Promoters have used this practice to extract “exclusive promotional options’’ from boxers who already have a promoter, and who would not otherwise enter into a contract with a new promoter. The athletes would be better served, as would open competition in the sport, if boxers were free to contract with those promoters they personally choose, rather than being coerced to contract with a promoter who is in the position of barring a lucrative bout.

This practice also has enabled a single promoter to gain control over a majority of championship bouts in a weight division because it results in one promoter having control over both the champion and the challenger. No matter which boxer wins a title bout, the promoter remains in control over who may compete for that title, since he has both contestants under exclusive contract. If a boxer who seeks to challenge a champion (or a more established boxer) refuses to provide long term contractual rights to the promoter, the boxer will be denied the right to compete in the bout. This practice frustrates the years of determined training and arduous competition that boxers endure, for they will be denied the opportunities that their successes in the ring have earned. No boxer will ever be able to compete for the title in that division unless they sign away future promotional rights to that promoter. The promoter thus has gained total control over an entire segment of a major professional sports industry. This contracting practice allows a promoter to achieve a monopoly on a substantial portion of championship-level competition in that particular weight division.

“Promoters compete for boxers, and boxers compete for titles”

To see how this combination of parity between promoters, independence of sanctioning organizations, and legislative protections impacts a fighter’s negotiations one only has to take a look at Andy Ruiz’s agreement to fight Anthony Joshua.

After Anthony Joshua’s original opponent, Jarrell Miller fell out following a failed VADA test, Joshua’s promoter, Eddie Hearn, began looking for a replacement so that they could keep their New York City date. His choices were limited though, for the opponent had to meet the title defense criteria for the WBA, WBO, and IBF titles that Joshua currently held. Fortunately for Ruiz he was rated by all three, putting him on the short list of possible replacements.

Hearn was thus limited to a small pool of fighters that could satisfy the sanctioning organizations, and these opponents knew this fact and could ask accordingly. If the offer was too low, they could turn it down and bet on themselves getting a mandatory in the future or an offer from another promoter that was in also need of a rated contender.

In MMA, there is obviously nothing compelling a promoter to negotiate with a specific group of contenders. Instead, because the position is open to any fighter the promoter chooses, you will often see fighters engaging in “reverse auctions,” where they bid each other down in hopes of getting the bout.

In addition, where the UFC has often demanded the signing of a long term contract before granting a big fight — something Cris Cyborg, Fedor Emalianenko, and Jorge Masvidal have all criticized the promotion for — the most Hearn’s Matchroom Boxing USA could demand of Ruiz was an option of no more than a year. After Ruiz’s upset, this option ended up being a rematch in Saudi Arabia later that year.

The use of this option obviously limited Ruiz’s earning in the rematch, but was still much less restrictive than what we find in MMA, where fighter are often required to sign exclusive multi-fight deals before receiving the opportunity. He was thus still free to capitalize on the increased notoriety he gained for briefly holding the title. And if Ruiz had been a mandatory challenger, then Hearn would have been unable to even request any options or guaranteed rematches.

The end result of these multiple competing promoters, independent titles, and Federal protections is a much more robustly competitive market. This is most apparent in the revenue split between promoters and their athletes. In the UFC, less than 20 percent of their revenue is earmarked for fighter costs, while in boxing “70 percent is common” for promotions like Golden Boy, Top Rank, and Lou Dibella. So while the two sports might generate almost identical revenues, athletes in boxing see three times the total payout. This simple fact is what explains the vast gulf between top MMA fighters and boxers purses.

Therefore the major difference between the two sports is that in boxing “promoters compete for boxers, and boxers compete for titles,” as Carlos Newton once summed it up. Meanwhile in MMA it is the inverse: in order to compete for a title, fighters have to compete with each other to get the promoter to sign them. This means conceding to the promoters demands at almost every step.

This is not an absolute. Obviously some MMA fighters have more leverage than others, while most boxers and fighters in general have little to none when dealing with their promoters. But as one rises in the ranks, it’s inescapable that boxers see their ability to negotiate increase much more dramatically than we see with MMA fighters.

This also explains the very different ways payments are usually contracted in the two sports. MMA fighters have mostly static contracts. They are typically divided in their base payment and a win bonus, both of which may rise after every victory, but with the exception of a few fighters that have PPV bonuses or higher rates for championship bouts, the vast majority get the same whether they kickoff a prelim or headline an ESPN event. Any change in pay for the most part requires negotiating a whole new contract.

Boxers though often have contracts that are much more dynamic. The contracts often call for a purse minimum based on the placement of the match on a card. So a four-rounder club show would play one amount, appearing on Showtime broadcast another, and championship bouts even more. Jason Cruz of MMA Payout has shared the contracts of Shohjan Ergasev and O’Shaquie Foster, which offer details on these purse minimums.

The term “minimum” is important here. While MMA fighters are expected to fight for the same amount regardless of how much the event generates, boxers are expected to ask for more if the fight is projected to be more lucrative.

So a boxer could accept his minimums for most of his bouts, but once he is offered to headline a Showtime or ESPN card in which the promoter would be paid millions, the boxer’s management might demand a large portion of that license fee. The promoter might turn it down, but with the number of drawing boxers split between a number of promoters, and his broadcast partner having expectations that he needs to meet, he might have limited options. In addition, if it’s a title fight, a failure to come to an agreement could mean that the bout goes to purse bid, and all the effort spent on building up a fight would be lost as someone else promoted the match.

Jones-Cormier, Wilder-Fury and the risks boxing promoters take

Boxing promoters then often have to take risks, either by paying a fighter a large purse in hopes that the event will be so successful as to earn a profit for them, or by paying a fighter they hope to eventually put in a profitable event enough to keep them happy and under contract, even if it means taking a loss for now.

Inversely, the UFC takes almost no risks with their events. Their contracted revenues from ESPN alone are more than their total annual expenses. They enter the year, before even a ticket is sold or a PPV ordered, knowing that all they have to do is put on events and they’ll be profitable. And for events that see large upsides they offer fighters a bonus, a small percent of each buy, where as in the bigger boxing matches the promoters often have to give the boxers a majority share of the net.

This explains why even the biggest boxing promoters post earnings margins of 10 percent or less while the UFC is now close to 50 percent.

We see all of this at play with the pay earned by Jon Jones and Deontay Wilder, especially when discussing the bouts most often referenced for comparison: Jones vs Cormier, and Wilder vs Fury.

According to knowledgeable industry insiders, Jones’ two bouts with Daniel Cormier would have generated very similar revenues. Both were estimated to have sold around 800,000 buys, but the first match at UFC 182 saw a larger gate of $3.7 while the rematch’s ticket sales were only $2.4 million. With commercial pay-per-view sales, sponsors, and international broadcasts thrown in, each event likely saw around $30 million to $35 million in total revenue.

Expenses for marketing and production of the PPVs would run in the $7 million to $9 million range, while fighter expenses would have varied widely between the two events, with UFC 214 having the much higher payout.

In their first meeting, only Jones had a side letter or received a PPV bonus, although Cormier did receive a $1 million discretionary bonus. With these additional payments — not disclosed to the athletic commission, Jones made between $3.5 million to $4 million for UFC 182. Total fighter expenses would have been close to $6 million. The UFC’s net would have been close to $20 million.

For the rematch, not only did both Jones and Cormier receive a PPV bonus, but apparently so did Tyron Woodley, who was defending his welterweight title on the co-main. With industry sources estimating Jones again making $3.5 million to $4 million, Cormier around $3 million, and Woodley more than $1.5 million, total fighter pay would have been double that of UFC 182. The UFC’s net for 214 would have likely been closer to $15 million than $20 million.

The promoters for both Fury vs Wilder matches did not see anything close to that kind of return. For the first event, while PPV sales were much lower than what Jones-Cormier sold, the higher asking price and additional PPV sales in the UK probably allowed the event to generate just under $30 million in gross sales for PBC and Top Rank. From that, they had to pay their expenses, including guaranteed purses of $10 million for Fury and $14 million for Wilder. It is because of these guaranteed purses that the event probably lost the promoter a few million dollars.

For the rematch, the gross is thought to have more than doubled. While pay-per-views buys were almost identical to that of Jones vs Cormier, a PPV asking price $20 higher, at least 400,000 UK PPV buys, and a $16.9 million gate, all helped the event generated millions more than either UFC event.

Even though total revenues were thought to be more than $65 million, the event still lost millions for the promoters. Perhaps more than $10 million. The primary reason being the approximately $25 million to $30 million the two headliners were each guaranteed.

While Jones seems grossly underpaid based on the marginal revenue he adds to the event, the reverse seems true for Wilder. Why would he — and Fury — be paid more than they bring in? Why indeed would Wilder have been paid more than $10 million to face Dominic Breazeale and almost $20 million against Luis Ortiz, two matches that lost millions?

Because his promoter had to.

PBC wanted him fighting on their events, especially in potential future mega-blockbusters against Tyson Fury and Anthony Joshua, and they were willing to pay him millions to match what he was being offered to sign with DAZN. Only if they retained him, could they hope to host his fights with either Fury or Joshua. And only by paying him a large guaranteed purse could they get his team to accept a match with Fury, a match they had gambled would make much more than it did.

These are the kind of gambles boxing promoters have to make that the UFC doesn’t. A possibly apocryphal remark that Ari Emanuel supposedly said to some other WME executives summed it up: “the problem with the boxing biz model is that it’s thirty-seventy and it needs to be seventy-thirty for me.”

The UFC’s secret sauce defense

The UFC — and many of the fans — will counter that any comparison between boxing and MMA is pointless to begin with because while boxing fans might be paying for Wilder or Fury, with MMA fans what they are really paying for is the UFC. That it is the UFC’s production, structure, and aesthetics that make events successful, and without them the fighters would not only sell less, but make less with another promoter.

This is basically the UFC’s secret sauce defense they’ve employed in the antitrust lawsuit. And perhaps it is true. A simple way to prove it would be to release both Jones and Ngannou, and see how much their fight could generate in sales and what they could make in purses without the UFC brand. If the UFC is uniquely capable at promoting MMA, then we should expect it to bomb and the two disappointed in what they earned fighting outside the UFC.

Somehow I doubt the UFC would ever take this bet.