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Editor’s note: The views and opinions expressed below are those
of the author and do not necessarily reflect the views of
Sherdog.com, its affiliates and sponsors or its parent company,
Evolve Media.
* * *


Earlier this week, the United States District Court in Nevada made
an important decision in
Ultimate Fighting Championship
heavyweight Mark Hunt’s
ongoing lawsuit against Zuffa — the UFC’s parent company — and
Brock
Lesnar
, which the “Super Samoan” filed in the wake of
Lesnar’s failed drug test for UFC 200
. Specifically, the court
ruled in favour of Zuffa’s motion to keep Hunt’s UFC contract(s)
under seal, which means that, contrary to the presumption favoring
public access to judicial records, these documents will remain for the court’s eyes
only
.

It’s a disappointing decision. Hunt’s legal counsel did not contest
the motion, and the court seemed willing to accept the argument
that public disclosure of the documents would “harm Zuffa’s
contractual relationships with other fighters and its competitive
standing with MMA promoters” at its face value.

The UFC also had the testimony of one of MMA’s most influential and
controversial managers, Ali Abdelaziz, in its corner. Abdelaziz,
who manages lightweight champion Khabib
Nurmagomedov
among scores of other high-profile names, made a
declaration stating that many fighters wish to keep their
compensation a secret so as to protect from kidnapping and
extortion threats — no, really — and because it could somehow
disadvantage them in contract negotiations with the promotion.

The testimony of Abdelaziz is troubling to say the least. Not only
does it appear that an agent is going to bat for a promoter without
any apparent benefit to his clients — whose best interests he is
legally obligated to prioritize — but it also seems to contradict
Zuffa’s argument that if more was known about how fighters are
compensated, that would compromise the company’s bargaining
position.

One might have expected a court to interrogate such a discrepancy,
or perhaps take note of the fact that information on
athlete’s compensation is readily available in most other major
sports
with few reports of kidnappings. Unfortunately, it did
not.

The good news is that the same issue has arisen in the ongoing
antitrust lawsuit against Zuffa, where plaintiffs are opposing Zuffa’s motion to keep a
number of documents under seal
. That means there’s hope more
light will be shed on the promotion’s business practices and
fighter relations in the future, which I’ll discuss in greater
detail below.

Knowledge is Power

It should come as no surprise that secrecy is a central part of how
the UFC runs its business.

As a private company, the UFC is not required to publicly disclose
its revenues or profit margins, and whilst a small number athletic
commissions (such as in Nevada and California) disclose payouts for
MMA events, these do not include “locker room bonuses” and other
side deals, painting an incomplete picture of fighter finances.

In the past, UFC President Dana White liked to claim that fighters kept their purses a
secret out of self-preservation
— a disconcertingly similar
claim to that in Abdelaziz’s declaration. But the reality is that
fighters are legally forbidden from disclosing the terms of their
contract courtesy of a confidentiality clause.

This clause, and the rest of the standard Zuffa contract, became
public record in 2013 after then-free agent Eddie
Alvarez
was sued by his former promoter Bellator
MMA
. It states that “fighter[s] shall not disclose to any third
party… any information with respect to the terms and provisions of
this Agreement or any Bout Agreement”, alongside other
controversial elements like the champion’s clause, which
automatically extends a fighter’s contract if they hold a title at
the expiry of the agreement, and the retirement clause which gives
the UFC the right to retain the rights to a retired fighter in
perpetuity.

This muzzle — which the court referenced in its otherwise brief
ruling — is an important tool that has historically allowed the
UFC to control the narrative around fighter pay and disguise the
exploitation its business perpetuates.

Whereas White has in the past claimed that fighter salaries are “on
par with all the other sports leagues out there” and former Zuffa
CEO Lorenzo Fertitta told ESPN in 2012 that fighters made “not far
off what other major sports leagues pay as a percentage of
revenue,” fighters have been legally obstructed from corroborating
or refuting such an argument by reference to their own individual
circumstances.

Likewise, for many years, journalists have cautioned against
debating the fairness of fighter pay because, to use the words of
one influential media member, “[n]o one can say with certainty because we don’t
really know what they earn or how much the UFC makes.”

More recently, the investigate efforts of journalists like Bloody
Elbow’s John Nash
have revealed the claims of White and Fertitta to
be wildly untruthful
. The UFC pays fighters, inclusive of
bonuses and other back room deals, a very small portion of the
revenue their fights generate — approximately 15 percent compared
to 50 percent for the NBA, NFL, NHL and MLB — with a median bout
payout of just $22,000 between 2013 and 2015.

In the context of increasing labor unrest amongst the UFC roster,
fighters are also becoming more willing to disclose their financial
circumstances — including how the promotion’s bonus system has been
used as a hammer to silence dissent
.

And yet even in the face of this data, the organisation uses
mediums like “The Ultimate Fighter” to grandstand about being “the
only fight organisation on the planet… where [fighters] can make
millions of dollars” whilst myths about the UFC’s otherworldly compensation
persist
.

In other words, the veil of secrecy is doing exactly what the UFC
intended it to do.

Peeking Under the Curtain

It’s important to note that MMA promotions are far from the first
organizations to seek to hide information about their compensation
practices from employees and the wider public.

Players’ associations in major league sports had to fight for years
for full disclosure as part of wider reforms spearheaded through
collective bargaining, and only after the Muhammad Ali Boxing
Reform Act was passed in 2000 have boxing promoters across the
country been required to disclose most (but not all) of what
fighters make for events held in the United States.

Outside of sport, wage secrecy is also an ongoing social problem.
Although United States federal labor law makes it illegal for
employers to prevent employees from discussing their wages and
working conditions, in recognition of their harmful effects on
labor organizing, this often doesn’t deter large companies from
doing that anyway. More recently, campaigns requiring employers to make their pay
records publicly accessible have also been mounted in places like
Australia and the UK
as part of a wider effort to address the
gender pay gap.

For UFC fighters, there are a number of means through which the
curtain may be pulled down, though none are especially promising in
the current climate. As prefaced above, information on fighter
compensation may become publicly accessible through the antitrust
litigation.

Alternatively, fighters may soon be classified as employees,
as part of former UFC bantamweight Leslie
Smith’s labor dispute currently being heard by the National Labor
Relations Board
. This wouldn’t do anything automatically —
except perhaps making it harder for the UFC to enforce its
confidentiality provisions due to the aforementioned laws against
wage secrecy. But it could conceivably jump-start the push towards
unionization, and if that happens, it would make it much easier for
fighters to secure disclosures about compensation practices, for
example through a collective bargaining agreement.

Finally, if legislation expanding the aforementioned Ali Act to MMA
passes, it will require the UFC and other MMA promotions to
disclose fighter salaries on a much greater scale than they do
presently — although, again, this wouldn’t require complete
transparency.

Jacob Debets is a recent law graduate who lives in Melbourne,
Australia. He has been an MMA fan for more than a decade and trains
in muay Thai and boxing at DMDs MMA in Brunswick. He is currently
writing a book analyzing the economics and politics of the MMA
industry. You can view more of his writing at jacobdebets.com.


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