Opinion: MMA’s COVID-19 Cash Crunch

BREAKING: Professional Fighters League Reschedules 2020 Season to 2021 Due to Ongoing COVID-19 Pandemic.

Full Press Release: https://t.co/WKx6WrexZE pic.twitter.com/zEzBieKpWM

— PFL MMA (@ProFightLeague) April 20, 2020

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When the Professional Fighters League announced that it was canceling it 2020 season, it wasn’t exactly a shock. As the coronavirus pandemic continues to take its toll on the globe, public gatherings of more than a handful of people remain banned in most states, and social distancing measures continue to be encouraged in almost every country. What many found surprising, however, was that the promotion opted to pay a monthly stipend to its fighters during the health crisis in a gesture of goodwill, stating that the money would “help support them and their families throughout 2020.” Many pundits praised the move, with some going so far as to suggest that it could set a precedent for other large organizations like Bellator MMA and the Ultimate Fighting Championship as a way to help contracted athletes during this time.

However, the stipend came with a catch—a round of fighters being cut from the organization. While some might say that undercuts the stimulus given out to the remaining contracted athletes, that notion couldn’t be further from the truth. During these unprecedented times, the fact is almost every type of business is hurting, those based around live events especially so. With their main source of revenue reduced to nothing and the projected unemployment issues that are likely to linger even after the crisis is over, recovery will not be easy for entities that have relied on blue-collar discretionary spending. Given that the PFL is still in its infancy and has not yet carved out market share on par with Bellator MMA or the Ultimate Fighting Championship, the stipend was akin to a retention bonus in the corporate world, trying to make fighters feel valued and keep them from looking at other promotions that may instead opt to continue with shows during the pandemic.

Those organizations that are planning to move forward with events, however, are feeling the financial pressure, as well. The UFC is scheduled to host its ill-fated UFC 249 card on May 9 after postponing the event for three weeks due to the pandemic, this despite various calls from MMA media and the Association of Ringside Physicians to put a moratorium on combat sports. The promotion may not have much of a choice in the matter, as parent company Endeavor has been struggling with layoffs and pay cuts across the board and recently had its credit rating downgraded by S&P Global. To make matters worse, the entertainment conglomerate’s botched IPO in 2019 had already left the organization cash-strapped, so much so that $300 million of the UFC’s profits was used to pay a dividend to investors right before the pandemic hit. While UFC President Dana White no doubt wants to continue with events simply for the sake of the sport, the pressure on Endeavor’s crown jewel subsidiary to keep the talent agency afloat must be immense.

While the bigger MMA promotions are struggling to appease investors, calm business partners or deal with the large amounts of debt on their books, regional promotions tell a somewhat different story. Many smaller MMA organizations run on tight budgets and have very little overhead, lessening the effects of the stay-at-home orders plaguing the bigger companies. Although there are impacts to what little crew regional promotions do have, many have stated that the COVID-19 pandemic doesn’t put them in a dire situation and that they’ll be able to wait until the virus is contained.

Big or small, promotions aren’t the hardest hit financially in the MMA community by COVID-19; that unfortunate distinction belongs to their contracted athletes. Regardless of the promotion, fighters are almost universally bound to contracts that pay them per bout agreement, leaving the majority without any income from the profession. For those who fight full-time, that means that they’ve been essentially laid off for the time being, relying on their partners’ income, help from friends and family or having to look for another job during a crisis that has tens of millions searching for work. For others who were still working another job while they pursued their MMA career, it still means that their dreams of getting to hold a belt, get a call-up from a major organization or one day fight full-time are now on hold for the foreseeable future. Instead, they are having to focus their time towards that other profession, provided they still have it. Others who are towards the end of their careers and not in an organization that plans to keep hosting events are losing what little time they have left in the sport, possibly forcing them into retirement without the chance to end their careers the way they wanted.

Any way you look at it, the coronavirus pandemic is bad for business, and the MMA industry faces some tough challenges ahead. Promotions of all sizes will have to find a way to keep their operations running during the crisis, with some facing significant debt and others simply trying to keep their relevance on the regional scene. Fighters will face the toughest road ahead, with many having to find creative ways to not only train without a gym but also keep the lights on at home. It’s too early to say what the MMA industry, let alone the world, will look like when COVID-19 has come and gone, but as promotions and athletes adjust to the ever-fluid situation, it’s important to remember one thing: It’s likely not going anywhere anytime soon.