Forbes: Dr. Paul Gift's Analysis on Financials Released from the UFC Antitrust Lawsuit
Dr. Paul Gift recently blogged on Forbes about the UFC class-action, antitrust lawsuit. The lawsuit was brought by mixed martial artist who claim UFC suppressed their wages through unlawful, anticompetitive practices. A popularly debated financial metric is the percentage of revenues going to fighters as compensation. Until recently, information on UFC fighter ‘wage share’ was purely media estimates. Last Friday a court filing, for an upcoming evidentiary hearing in August, disclosed UFC financial information. The reports revealed the share of UFC event revenues going to fighters as compensation ranged from 18.6% to 20.5% from 2011 to 2013. This number is low in comparison to the Big 4 sports leagues in North American, which pays their athletes around 50% of revenues.
Dr. Gift says "in academic research submitted for publication but still under review, I’ve found the UFC’s most undercompensated fighters appear to be the handful of big names and popular personalities who collectively generated over 75% of the promotion’s variable content revenues." Analyzing UFC fighters' wage share and comparing wage share of athletes in more traditional North American Sports, Dr. Gift states the high likelihood that UFC exercises monopsony power in the input market for certain fighters. Read More