McGregor Upset Over Mayweather Would Put UFC Model to the Test

(Bloomberg) -- On Saturday night in Las Vegas, Floyd Mayweather will put his undefeated record on the line against mixed martial arts’ biggest star, Conor McGregor. But the person with the most to gain -- and lose -- may be Dana White, president of McGregor’s employer, the Ultimate Fighting Championship.

By letting McGregor step into the ring, UFC and its owner WME-IMG are highlighting the financial differences between boxing and mixed martial arts. UFC will make money on the fight, and a McGregor upset would give mixed martial arts newfound status. White’s company may also risk losing its biggest star to a sport that will pay him much more.

Whatever the outcome Saturday, McGregor will make more from his first professional boxing match than he has in 4 1/2 years as a UFC fighter -- one who’s held titles in two different weight classes and been a part of five of the eight most lucrative fights in UFC’s history, based on ticket sales.

McGregor could make $100 million from the fight, and Mayweather will make well over $100 million, White said Thursday in an interview with Bloomberg Television. “It’s tracking as the biggest digital event we’ve ever been involved in,” he said.

Saturday’s fight is expected to sell more than $72 million worth of tickets, a record for a professional fight of any kind. According to Bloomberg Intelligence, the match-up should also set a record for pay-per-view sales, with early estimates calling for about 5 million orders. That would surpass the 4.6 million orders for the 2015 fight between Mayweather and Manny Pacquiao.

Read more on the big fight from Bloomberg Intelligence

All of those numbers dwarf the take from the biggest UFC fights. When McGregor fought Eddie Alvarez in New York City last November, UFC sold a record $17.7 million in tickets. The promoter’s record for pay-per-view buys is 1.6 million, a night headlined by McGregor’s fight against Nate Diaz in 2016.

But it’s about more than boxing’s popularity -- the way fighters get paid in the two sports is also totally different. In a standard boxing pay-per-view event, fighters get about 60 percent of the pay-per-view money. (The rest is split between the network and the cable providers.) UFC doesn’t disclose how its money is divvied up, but the company keeps a large percentage of what’s available after the cable providers take their share. That’s why McGregor, as the sport’s biggest star, has likely never made more than $15 million for an MMA fight.

“The question is what parts of the UFC business model need to be changed in order to satisfy Conor’s monetary needs, now that he’s made over $100 million as a boxer,” said Ross Greenburg, former head of HBO Sports and a consultant for Showtime on the Mayweather-McGregor fight. “The UFC business model is threatened by this fight.”

Pay Criticism

In recent years, UFC fighters have criticized their employer for its relatively miserly revenue sharing, and few have been more outspoken than McGregor. In April 2016, he voiced his displeasure in a Facebook post, highlighting the amount of money he’d made for UFC in his previous three fights and clarifying that he’d refuse to fight unless he renegotiated his contract.

A few months later, after he knocked out Alvarez and UFC was sold for $4.2 billion to WME-IMG, he said he wouldn’t fight again unless he was given an equity stake in the company. “I want what I deserve,” he said. “I want what I earned.” He hasn’t been in an Octagon since, and White has acknowledged UFC may have to pay him more.

In the run-up to the Mayweather boxing match, McGregor has said that he’d like to continue to contend for titles in both MMA and boxing -- “and I will rule both with an iron fist.” It may be more complicated than that. He’s under contract with UFC and had to negotiate to make this boxing match happen. Any conversation about a future in boxing will likely have to include UFC.

A lot of this will depend on how McGregor fares Saturday. He’s a heavy underdog, but that hasn’t stopped the betting public from backing him to win. Should McGregor lose, Greenburg said there probably won’t be enough of an appetite for him to keep boxing, at least not in another major pay-per-view fight. If he wins, it’s great for UFC’s brand -- the company can say its champ, with no pro-boxing experience, did what 49 previous pros could not -- but that likely complicates the MMA star’s return.

“The more record-breaking this fight is, the bigger the issue they have with Conor McGregor and his managers when he tries to negotiate his next UFC deal,” Greenburg said.

Meantime, White is enjoying his foray into boxing promotion.

“When two guys like this come together, these type of events show you where the bar is set for the right guys and the right place at the right time -- and what a big fight can do,” he said on Bloomberg Television.

To contact the reporter on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net.

To contact the editors responsible for this story: Janet Paskin at jpaskin@bloomberg.net, Crayton Harrison, Jessica Brice