The Business Side of MMA: Where the Money Around Fight Nights Actually Comes From

Dating all the way back to the 648 BC Olympic Games, which featured a sport called Pankration (similar to modern-style MMA), MMA rose to popularity during the 1990s and became prominent in the US in 2005, thanks to The Ultimate Fighter – a reality TV show produced by the founders of the UFC that was filmed as a last resort measure to gain mainstream exposure for mixed martial arts. Twenty years and thirty-three seasons later, the show continues to draw millions of viewers, with the UFC now controlling the majority of revenue in the MMA market. 

The money generated by MMA as a whole comes from many different sources, some more surprising than others. However, the biggest source of money nowadays comes from broadcasting and media rights, with giants like the UFC making multi-billion-dollar deals with sports media companies to sell exclusive broadcasting rights and secure stable, predictable income.

Just last year, Paramount seized UFC from ESPN in a 7-year deal worth a whopping $7.7 billion, which will see Paramount become the exclusive US distributor of UFC’s top-line numbered events (13 per year) and secondary Fight Night events (30 per year) via its Paramount Plus streaming service. The recent agreement kills the pay-per-view (PPV) model, with all UFC events (big cards + Fight Nights) now automatically included in a monthly subscription and streamed on Paramount+.

The end of PPV marks a significant milestone for the UFC, which used the pay-per-view model for many years. With the new model, both companies hope for a more stable, predictable revenue that will attract a wider fanbase to watch the fights, including people who wouldn’t have paid $80 for a single pay-per-view event in the past. 

But there’s another group affected by the new deal: the fighters. Under the old system, top stars – such as Conor McGregor – earned a share of PPV revenue based on the number of buys, making fight promotion and viewership a crucial part of their income. To combat this issue, the PPV bonuses are now being replaced with new incentives: apart from base pay, which is often too low compared to the profits generated by the industry as a whole, the best fighters of the night may also receive additional bonuses tied to their performance. 

While in other industries, bonuses are used to attract new audiences (e.g. a casino bonus used to encourage new players to sign up), bonuses in the UFC are used to motivate fighters to perform better and harder, ensuring the best possible show for the audience. In fact, UFC has recently announced it will double performance bonuses to $100,000 each, as well as add a brand new $25,000 bonus to fighters who knock out or submit their opponent but don’t get one of the main bonuses. The decision came after a decade of pressure from both fighters and fans alike, with many criticizing the clear gap between fighters’ earnings and the UFC’s profits.

Revenue from ticket sales continues to bring in millions of dollars per event, with the biggest fights now able to generate $5M–$30M+ in ticket revenue alone. The world’s biggest pop stars are attending the events, and VIP boxes worth thousands of dollars sell out in minutes. The appetite for live events is as high as ever – although the revenue from live events is still much lower than the revenue from broadcasting rights. 

Live event attendance is closely linked to another important revenue source of any sport: merchandise. Fans who are willing to pay and attend the event live are generally already highly invested in the sport, making it much easier for promotions like UFC to cross-sell and generate additional revenue through merchandise sales. Fans want to wear the merchandise during the event, making it a core part of the experience and increasing the sense of belonging.

Most major businesses understand the psychology of merchandise and take advantage of it: they offer exclusive pieces only available at the venue, invoking a sense of scarcity and exclusivity. Additionally, fans watching the event online see others sporting good-looking pieces, which often leads to additional online sales from fans who want to feel closer to the rest of the crowd. Most of the outfits worn by the fighters during fight nights can also be purchased by the fans, providing the ultimate opportunity of feeling close to your favourite fighter.

UFC has also allowed video game companies like EA to license its name for an EA Sports UFC video game series, with the latest instalment in the series, EA Sports UFC 5: Ultimate Edition, released for PlayStation 5 and Xbox Series X/S in 2023. While no sales data is available at this moment, the game received generally positive reviews from critics upon release and was the 12th most downloaded game of 2024 in Europe and 7th in the USA, suggesting strong sales revenue. 

Additionally, the industry is experimenting with new revenue streams, like selling fight data and odds feeds to sports betting companies or expanding to international markets, such as the Fight Island – a series of UFC events held on Yas Island in Abu Dhabi during the COVID-19 pandemic.

In short, MMA is a multi-billion-dollar industry with dozens of revenue streams and significant potential for continued growth – both in the US and internationally. Despite the possibility of massive growth, however, the industry faces several major challenges, including fair compensation for fighters (especially mid-tier ones) and increasing competition from sports like boxing. The issue of fighters’ compensation continues to be the single most talked-about issue within the industry by both fans and press alike.