Boxing vs MMA Business Models 🏆

I love combat sports. It’s the one type of sport that is equally about the business of the event as it is about the skill of the athletes.

Why shouldn’t it be, after all? The athletes put their life on the line for fame & fortune; & the longer they compete the more likely longterm injuries or death will occur.

Ideally an athlete should become pro, compete for a short amount of time making the most money & impact possible, & retire.

Boxing & MMA have very different approaches to the business approach, but which is better?

How the UFC business works 🤼‍♂️

The UFC is the biggest name in MMA. Whilst I’d love to look at the other brands in the space (such as Bellator), the UFC is the most unique in its business approach & pretty much dwarfs every other brand in MMA.

Approximately 20% of the UFC’s revenue goes towards paying the fighters, with the rest going towards the production of UFC.

This is very different to most organisations, as it’s paying fighters less than half the amount its nearest competitor does. However, due to the UFC’s size the athletes still make more through them despite the percentage split being less.

Additionally, due to the size of the UFC’s following, it’s a unique opportunity for athletes to launch into new business ventures or cross into other sports which offer a bigger payday (like boxing).

For example, Connor McGregor launched his whiskey brand which was sold for roughly $500m. Or Ronda Rousey who left the UFC to have a career in the WWE

As a result the UFC generally has this relationship with its athletes:

  • UFC signs a young, talented athlete.
  • Athlete raises up the ranks, gaining popularity.
  • The athlete sees more money than they ever thought possible, resulting in them elevating the UFC brand with their enthusiasm about the business.
  • They begin being the headline event at the UFC.
  • The athlete realises how much revenue they generate the UFC & publicly tries to gain the ability to renegotiate their contract.
  • The UFC doesn’t budge & the athlete either stays or tries to go elsewhere with less success.

The UFC’s percentage split, whilst problematic for the athlete, is why they’re such a big business. They offer arguably the best combat sports experience for viewers.

As athletes can only compete against others within the organisation there’s no real “journeymen” (athletes who make a career on losing), unlike boxing which I’ll dive into deeper later. This makes fights more unpredictable & less one sided.

The UFC doesn’t need to put all its stock into one cash cow fighter, they’re more focused on creating an experience that generates repeat viewers. Pushing marketing, production quality, etc.

Other sports rely heavily on the athlete promoting the event & generating revenue so need to give them a bigger percentage, whereas the UFC can survive without its top fighters because it can promote new talent.

The UFC is able to regularly host events, make them entertaining for fans & make a big bit of cash.

The boxing business model 🥊

The organisations within boxing are an absolute mess. There’s not one organisation that hosts the biggest events, as a result there’s a lot of headaches & issues due to bureaucracy.

Here’s all the organisations involved:

  • Management & promotion
  • The commission.
  • The boxing sanction.
  • The broadcaster.

As a result getting Anthony Joshua & Tyson Fury on the same conference call to even discuss the possibility of a fight is near impossible.

Then you’ve got the purse split. Boxers can earn up to 80% of the revenue of a fight making it very lucrative, but the percentage split between the two fighters is often a tough negotiation.

Recently the world title fight between Tyson Fury & Dillain Whyte almost didn’t happen because Whyte (a huge name in boxing) was offered a measly 25% of Fury’s payday.

As a result big fights happen irregularly & often fall through.

The UFC doesn’t really have this issue, & seems to split revenue relatively evenly even if one name is much bigger in significance (for example the Francis Ngannou vs Ciryl Gane).

To even get a fighter to the point they can talk about world title fights you have to build up their resume. Often this means initially fighting “journeymen”.

Journeymen” make a career losing to young boxers to help build up the prospect’s portfolio. They’re a low risk way for promoters to create credibility & improve the fighter value.

Again, this is another thing the UFC doesn’t have to do. Everyone competing is already recognised as elite, & fights aren’t expected to be brutal one-sided slaughters.

Celebrity athletes like Jake Paul are disrupting this to an extent. They’re proving that fighters don’t need an extensive boxing portfolio in order to sell tickets. Right now, though, it seems like the slow buildup of a fighter before putting them under pressure will remain the standard.

So which is better? 🏆

Personally boxing is my favourite of the two sports… But if boxing had one leading organisation like the UFC it would be even better.

The UFC could be improved – I mean the fact its biggest athletes want move over to boxing is worrying – but the business is clearly very profitable & the experience it offers fans is incredible.

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