New UFC Antitrust Filings Give Further Insight into Fighter Negotiations, Compensation
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Evidentiary hearings were finally held in late August regarding an antitrust suit brought against the Ultimate Fighting Championship by Jon Fitch, Cung Le and other fighters back in 2014.
The hearings released a treasure trove of documents that gave the
public new information about the UFC, including
event costs, the promotion’s
financial data and the company’s growth expectations following
its
sale to Endeavor. A notable absence from the hearings was
former UFC matchmaker Joe Silva, who was expected to testify in
regards to athlete compensation policies during his tenure with the
promotion. While there was a brief private sidebar between the
judge and both attorneys concerning the matter, Silva never made it
to the stand in Las Vegas. He did make it to the stand, however, in
Richmond, Virginia. On Sept. 28, Silva provided testimony about the
specifics of his role at the UFC, as well as discussions between
himself and various managers regarding fighter contracts. Part of
the testimony was struck from the record after the plaintiffs
objected that Silva had previously testified that he did not pay
athletes based on wage sharing or particular events.
Despite Zuffa hoping to have that motion reconsidered, it is
unlikely that the court will reverse its own ruling based on the
evidence provided.
The court documents filed in respect to Silva’s testimony have given a rare peek behind the curtain into how managers and fighters negotiated with the former UFC vice president of talent relations, as well as his methodology in determining athlete compensation. Negotiations between fighters varied wildly depending on their popularity and perceived potential, but the majority had a similar structure of increasing pay for a win or remaining flat for a loss throughout the contract duration. Silva also made sure to point out in multiple communications to different managers that every fighter had visibility into other fighters’ purses as a way to justify keeping wages lower, though there are times he would use other methods of compensation or other perks to get around this.
A prime example of how conversations regarding re-signing with the UFC could go is shown by Silva’s contrasting interactions between the managers of Duane Ludwig and Ricardo Almeida. During multiple email pleas from Ludwig’s manager, Silva states that because Johny Hendricks was signed with no raise, he could not give Ludwig the $18,000/$18,000 deal his manager was seeking and that he should understand, as Ludwig was “gifted” a decision win against Nick Osipczak after losing two fights in a row. Meanwhile, in discussions with Almeida’s manager the UFC hall of famer takes a very different approach, offering to set up Almeida against lower-tier opponents in his first two fights back and include a clause which would prevent the UFC from cutting him until he lost twice -- something that was uncommon for the promotion. After a further push from Almeida’s manager, Silva even offers to throw in a $10,000 signing bonus, most likely because, as stated in the first email, he believes Almeida “has a lot of potential.”
In both examples, Silva seemingly followed an internal formula to calculate what the fighters would receive based on where they were in their careers with the UFC. By using this approach, the organization could get an idea of the overall financial impact of changes to athlete compensation, such as setting minimum fighter pay at different levels. Despite what managers may have told their clients in regards to successful negotiations, this structure of set incremental raises based on performance and contract numbers seemed to be the norm for fighters under the promotion’s banner while Silva was an employee.
When a fighter would reach a certain level of popularity or have a particular appeal in the company’s eyes, however, this structure could change. There are several examples of contracts that include flat payments for competitors, as well as specific pay-per-view buy bonuses based on the number of overall PPVs sold. Many bigger name fighters signed letters of agreement with the UFC that dictated side deals separate of purses, including one example in which the promotion was required to “locate and purchase” a new “Dodge Challenger SRT Hellcat” for Quinton Jackson. On top of all this, Zuffa also handed out discretionary bonuses during Silva’s tenure, including a $10,000 bonus to Brendan Schaub because “it was a big step up” for the heavyweight in terms of competition.
Whether or not these tactics are present in current UFC athlete negotiations is not quite clear. While some of the filings point to specific events and fighters as recent as 2015, since that time, Silva has left the promotion and Endeavor has taken control of the company. It is probably safe to assume that, at the very least, remnants of these types of negotiations and structures are involved in today’s UFC contracts, especially since they have been effective at keeping overall fighter costs within the company’s preferred range. Whatever the case may be, these filings certainly give an idea of what it is like to be a prizefighter for the world’s largest MMA promotion and may end up proving crucial in the upcoming antitrust lawsuit against the UFC.
Evidentiary hearings were finally held in late August regarding an antitrust suit brought against the Ultimate Fighting Championship by Jon Fitch, Cung Le and other fighters back in 2014.
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The court documents filed in respect to Silva’s testimony have given a rare peek behind the curtain into how managers and fighters negotiated with the former UFC vice president of talent relations, as well as his methodology in determining athlete compensation. Negotiations between fighters varied wildly depending on their popularity and perceived potential, but the majority had a similar structure of increasing pay for a win or remaining flat for a loss throughout the contract duration. Silva also made sure to point out in multiple communications to different managers that every fighter had visibility into other fighters’ purses as a way to justify keeping wages lower, though there are times he would use other methods of compensation or other perks to get around this.
A prime example of how conversations regarding re-signing with the UFC could go is shown by Silva’s contrasting interactions between the managers of Duane Ludwig and Ricardo Almeida. During multiple email pleas from Ludwig’s manager, Silva states that because Johny Hendricks was signed with no raise, he could not give Ludwig the $18,000/$18,000 deal his manager was seeking and that he should understand, as Ludwig was “gifted” a decision win against Nick Osipczak after losing two fights in a row. Meanwhile, in discussions with Almeida’s manager the UFC hall of famer takes a very different approach, offering to set up Almeida against lower-tier opponents in his first two fights back and include a clause which would prevent the UFC from cutting him until he lost twice -- something that was uncommon for the promotion. After a further push from Almeida’s manager, Silva even offers to throw in a $10,000 signing bonus, most likely because, as stated in the first email, he believes Almeida “has a lot of potential.”
In both examples, Silva seemingly followed an internal formula to calculate what the fighters would receive based on where they were in their careers with the UFC. By using this approach, the organization could get an idea of the overall financial impact of changes to athlete compensation, such as setting minimum fighter pay at different levels. Despite what managers may have told their clients in regards to successful negotiations, this structure of set incremental raises based on performance and contract numbers seemed to be the norm for fighters under the promotion’s banner while Silva was an employee.
When a fighter would reach a certain level of popularity or have a particular appeal in the company’s eyes, however, this structure could change. There are several examples of contracts that include flat payments for competitors, as well as specific pay-per-view buy bonuses based on the number of overall PPVs sold. Many bigger name fighters signed letters of agreement with the UFC that dictated side deals separate of purses, including one example in which the promotion was required to “locate and purchase” a new “Dodge Challenger SRT Hellcat” for Quinton Jackson. On top of all this, Zuffa also handed out discretionary bonuses during Silva’s tenure, including a $10,000 bonus to Brendan Schaub because “it was a big step up” for the heavyweight in terms of competition.
Whether or not these tactics are present in current UFC athlete negotiations is not quite clear. While some of the filings point to specific events and fighters as recent as 2015, since that time, Silva has left the promotion and Endeavor has taken control of the company. It is probably safe to assume that, at the very least, remnants of these types of negotiations and structures are involved in today’s UFC contracts, especially since they have been effective at keeping overall fighter costs within the company’s preferred range. Whatever the case may be, these filings certainly give an idea of what it is like to be a prizefighter for the world’s largest MMA promotion and may end up proving crucial in the upcoming antitrust lawsuit against the UFC.
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