Conor McGregor and the UFC: who will blink first?

Gloves off as world champion demands pay reflecting his vast worth to $4.2bn firm

UFC star Conor McGregor turns his hand to acting by appearing in an advert for America's Pegasus World Cup. Video: Pegasus World Cup Invitational

 

Conor McGregor may be taking a break from the octagon but he emerged this week as the star in a series of online comedy sketches in which he will feature as the honorary “13th jockey” for the Pegasus World Cup Invitational, a thoroughbred horse race billed as the “world’s richest”. To promote the series, McGregor did a Q&A in which he was asked what happened to him in the story of the 13th jockey. “I got paid,” he replied.

McGregor is a deadly serious businessman but he is also capable of sending up his reputation for having a neck like a jockey’s proverbials when he sits down at the negotiating table.

When he defeated Eddie Alvarez in November to become the UFC’s first simultaneous two-weight world champion, rather than catch a breath, and some acclaim, in the city that never sleeps McGregor ploughed remorselessly forward. He wasn’t talking about a contract worth $100 million. That hat was 12 months old. This time he was demanding part ownership of the company. If chat show host Conan O’Brien had his slice of the pie, why not the UFC’s biggest ever star?

This was not a spontaneous gambit. In June 2014, having recovered from tearing his anterior cruciate ligament, McGregor tweeted: “Two belts and shares in the company.” At the time, McGregor was an unranked fighter and his fellow featherweights, unaccustomed to such bravado, regarded him as a babbling irritant.

Master plan

One half of McGregor’s master plan has come together. The other, however, doesn’t seem to be going so well. The response to his demands has been silence. What’s more, the Dubliner enjoyed his historic status for a mere four weeks before his featherweight belt was unceremoniously taken away.

Baldly confronting the UFC illustrates the audacity that has made McGregor the most popular combat sports athlete on the planet. His actions have no precedent in the history of the Ultimate Fighting Championship, the world’s premier mixed martial arts company which all of a sudden has become so ubiquitous that many people think it’s the name of the sport, rather than a promotion.

Until last July, the UFC was owned by brothers Frank and Lorenzo Fertitta, alongside minority stakeholder Dana White. The Fertittas are casino moguls and the gamble they took in 2000 when they paid $2 million for an ailing organisation ended in a substantial profit when Hollywood talent agency WME-IMG shelled out $4.2 billion for the reins.

According to Forbes, the sale put the UFC behind only the Dallas Cowboys and ahead of Real Madrid, the New York Yankees and Manchester United as the most valuable sports franchise on the planet.

The company manages a roster of over 540 elite fighters and stages over 40 events around the world each year, generating some 2,000 hours’ worth of material. How much revenue the company brought in under former parent company Zuffa, as well as other questions related to revenue breakdown and exact fighter pay, have has not been easy to clarify, given that Zuffa is a private entity and was under no obligation to share such information.

Show me the money

By acquiring every credit report on Zuffa issued by Moody’s and Standard and Poor’s, Bloodyelbow.com was able to shed some light on the subject. It estimated that the UFC passed the $300 million revenue mark in 2009 and $400 million in 2010, and that there was a 50 per cent increase in total revenue from 2009 to 2013 – the year McGregor made his debut in Stockholm.

Mid-level fighters in the UFC earn $20,000 per bout. Win, and that payout becomes $40,000. On his website, lightweight Myles Jury provided a breakdown of expenses incurred during fight camp: gym ($2,000), management ($4,000), taxes ($6,000), medicals ($500), extra coaching ($1,000) and miscellaneous ($1,000), leaving a profit of only $5,500 – excluding bonuses and Reebok sponsorship – in the event of a loss. Few fighters get in the octagon more than three times a year and many earn as little as $10,000 per fight.

Vastly underpaying fighters is how the UFC likes it but it does need stars in order to sell pay-per-views, and over the years Brock Lesnar, Anderson Silva and Georges St Pierre have twinkled brightly in the firmament.

However, the biggest star has always been the UFC itself. During contract negotiations with Lorenzo Fertitta, heavyweight fighter Matt Mitrione was told that fighters in the cage were secondary. What the company sells is the production and the show.

To prise open tight fists, prizefighters must solve an important equation: they must make people care. With supreme élan, McGregor has turned UFC nights in living rooms across the world into indoor faction fights. Either you are behind the Irishman until the end of time or you fervently wish upon him a comeuppance that is commensurate to the insolence of his words – which would be a very grave comeuppance indeed. The bottom line is, you pay to watch him fight. That became clear when he started headlining marquee events that cost American viewers $60 to buy.

In 2014, UFC earnings dropped by an estimated 40 per cent. However, 2015 was described by Lorenzo Fertitta as “pretty much the best year in the history of the company” as the UFC took in over $650 million in revenue. The year just past has been better again. There is one reason for that.

The $4 billion man

McGregor’s 3.5 million pay-per-view buys from July 2015 to March 2016 (three fights) was more than the entire UFC managed in 2014, estimated at about 3.2 million. The Irishman is bringing in more money than over 500 other fighters combined.

With an estimated 1.6 million buys, he is understood to have broken the UFC pay-per-view record in August when he rematched Nate Diaz at UFC 202 and his numbers against Alvarez at UFC 205 are expected to equal, and perhaps surpass, that again. Reported Bloodyelbow: “If we go by the preliminary buy prediction for UFC 205, which is around 1.6 million buys, Conor McGregor has drawn an estimated six million buys in a 12-month period [since he defeated Jose Aldo]. Remember, the entire UFC roster drew 3-3.2 million in 2014. Conor McGregor drew double that, on his own, in 12 months.”

Which is why McGregor called himself “the $4 billion man” last summer.

Certain moments stick in the mind in this struggle that has more than a whiff of Frankenstein and his monster. After the Dubliner knocked out Aldo, a cage-side Frank Fertitta could be seen grabbing the gold championship belt that was soon to be around McGregor’s waist and furiously throwing it down. That was an incident. The saga was removing McGregor from UCF 200 for refusing to attend a press conference.

If the new regime is desperately seeking to prevent McGregor from dismantling the immutable law of the UFC and becoming bigger than the promotion, it seems it is happy to follow the example set by the old one, despite all evidence that it is probably too late already.

WME-IMG has a $4 billion debt to service, the basis for which – projected earnings – has caused Federal Reserve bank supervisors concern. The plan was not to see the UFC’s only other bankable star, Ronda Rousey, punched into likely retirement by Amanda Nunes last weekend. After 48 seconds. Observers declared McGregor the big winner of UFC 207, and all he had to do was watch it on television. He is not only the UFC’s biggest ever star – he is the only one they have right now.

The loquacious lightweight champion abhors a vacuum. The silence especially. It’s deafening. By flirting viciously with WWE wrestlers and deepening his rivalry with Floyd Mayweather Jr, McGregor ensures his machine-gun brogue echoes in every nook and cranny of the combat sports world. He wants $100 million to face the man who earned more than double that against Manny Pacquiao in 2015. Will we ever see that scrap and will it be ridiculous? Who knows. And probably. But McGregor is reframing his value to the UFC. He is planning, calculating. As always. Showing no signs of being satisfied. The question is: Will he ever be?

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