Are UFC fighters employees or contractors? The distinction could mean millions

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Wild

Wild

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Bellator President Scott Coker heard the complaints from his new signees.

Fighters who came over as free agents after their UFC contracts expired had very similar gripes, many of them about the UFC’s “athlete outfitting policy” under an exclusive apparel deal with Reebok. What Coker couldn’t understand was how it was even legal.

“Listen, they’re independent contractors,” Coker said in June. “How they’re forced to wear a uniform, to this day, still baffles me. It should be against the labor laws or something.”

...

As the UFC has placed more restrictions on its fighters, the case for keeping them classified as independent contractors has weakened, according to some observers both in and outside the MMA industry. And if the employment classification of UFC fighters was ever successfully challenged, it could mean major change for the industry leader.

“One consequence for the UFC is if they’re misclassifying employees as independent contractors, then they owe the IRS a lot of money,” said Justin Swartz, an attorney with the firm Outten & Golden, one of the nation’s largest law firms to focus solely on employment law.

Swartz has worked on similar cases involving the misclassification of exotic dancers in New York, where some clubs were eventually forced to pay millions of dollars in settlements after years of misclassifying employees as independent contractors.

“Dancers at strip clubs, they have schedules, they have rules to follow, and they have no business at all without the club,” Swartz said. “In some ways it’s the same with fighters. The fighters rely on the UFC in order to do their business, and they have a dress code, they have a lot of rules. But if they’re getting paid as independent contractors, then they’re paying their own employment tax, and they may be entitled to a refund.”

It’s not just a question of taxes, either. As independent contractors, fighters enjoy fewer protections than they would as employees. Their right to form a union isn’t protected. If they’re fired, they can’t seek unemployment benefits. An injury on the job doesn’t entitle them to workers’ compensation.

By keeping fighters as independent contractors while heaping more and more restrictions on them, the UFC has managed to have the best of both worlds, according to Gary Ibarra, a manager who has represented fighters such as Cung Le and Ben Rothwell. (UFC representatives declined to comment for this story.)

“(The UFC wants) the benefits of having employees, stuff like forcing the guys to wear uniforms, basically, which is an earmark of an employee,” Ibarra said. “But also when certain things happen that would be negatives, then, no, the UFC can say, ‘Hey, they’re independent contractors.’ That’s because, since the UFC has kind of gone unchecked, no one has forced them to adhere to one side or another.”

Which is not to say that a legal challenge couldn’t be forthcoming.

Full Article: Are UFC fighters employees or contractors? Why the distinction matters – and could mean millions
 
LurkenLikaGherkin

LurkenLikaGherkin

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1) They are, on paper -- just to (re-) iterate the point -- independent contractors. 2) Gonna have to be a Conor or somebody like that to bring this to a test. Nobody without pull is going to stick their neck out and take one for the team to challenge any of the legality of how the UFC is handling overall commerce to date.

It's probably coming, though, and inevitable, as the "league" grows in size and the diversity of the players involved (management, legal, participants) grows.

If they want to be on a par with the NFL, etc., they're going to end up in the same place MLB/NBA/NFL etc. are in terms of labor conflicts & resolutions. They have too many smart lawyers (& now management & entertainment people) in the mix now for the company to be unaware of this. They're just milking the golden, unfettered cow for as long as they can before regulation comes down and is in the game to put the brakes on unchecked exploitation. Chances are this means the Conors of the the world get special treatment -- incongruously special, relative to plebes -- because they are the ones who have the pull to make the gravy train slow down and make less gravy less unproblematically.
 
FrankieNYC

FrankieNYC

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Until WWE's contracted performers lose the IC classification, UFC is fine
WWE is far more restrictive

Regarding the "uniform" thing
Any Producer of an event has that control
That does not mean you are an employee

Actors/extras on a set are told what to wear ... they are not employees
Staff at a trade show are told what to wear & they are not employees
 
nuraknu

nuraknu

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FrankieNYC said:
Until WWE's contracted performers lose the IC classification, UFC is fine
WWE is far more restrictive

Regarding the "uniform" thing
Any Producer of an event has that control
That does not mean you are an employee

Actors/extras on a set are told what to wear ... they are not employees
Staff at a trade show are told what to wear & they are not employees
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I was going to say, some of the ACs make the refs wear a particular uniform, shirt with logo, whatever. And they are independent contractors too. No one has ever suggested that's unfair and that they should be able to add sponsor logos.
 
FrankieNYC

FrankieNYC

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zrg3g521v said:
Are prostitutes independent contractors? Because that's what the UFC treats it's fighters like - whores.
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Damn lol
I can imagine what you must feel about how Bellator treats fighters, since 50% have to sell tickets just to be on a show & most of those get only $1-2k
 
B

blas4ublasphemy

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I've never understood how the UFC could possibly take away an established avenue of the fighters income without being willing to let dissatisfied employees out of their contracts signed before the policy change. It would be like a diner deciding to keep all employee tips and still paying below minimum hourly wage that was only accepted because the tips are an established element of this type of employment.
 
D241

D241

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I couldn't remember the first name(until I looked it up), but I was thinking Gary Ibarra was Chuck Liddell's old trainer


But alas, that is Juanito
 
Chromium

Chromium

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FrankieNYC said:
Until WWE's contracted performers lose the IC classification, UFC is fine
WWE is far more restrictive

Regarding the "uniform" thing
Any Producer of an event has that control
That does not mean you are an employee

Actors/extras on a set are told what to wear ... they are not employees
Staff at a trade show are told what to wear & they are not employees
Click to expand...
WWE at least compensates wrestlers for their likeness whenever they use them in the merchandise they sell.
 
Chromium

Chromium

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FrankieNYC said:
So does UFC/Reebok

WWE pays about 5-8% of revenue to their contracted performers
UFC paid $80m in 2015 (13%)
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1) Where did you get the 5-8% figure from? (not saying that one's wrong) And 2) where did you get the $80 million figure from? I'm genuinely curious, I've definitely looked around for the second number. Also I'd damn well hope the UFC gives a higher percentage, they have over five times the number of athletes under contract, and yet unlike WWE a lot of their production crew are part-timers.. And again, UFC fighters don't get compensated for being in a videogame, or for any other UFC merchandise outside the Reebok deal, where they lost out massively in losing other sponsors.

EDIT: I should add that it does, however, feel kinda gross to even slightly defend WWE business practices, and WWE wrestlers should 100% be considered employees.
 
GSPTrainingInAPool

GSPTrainingInAPool

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No way a company like WMEIMG bought the ufc without looking at this. No way they would have bought it knowing that at some point they would be paying millions in taxes & fines & legal fees
 
FrankieNYC

FrankieNYC

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Chromium said:
1) Where did you get the 5-8% figure from? (not saying that one's wrong) And 2) where did you get the $80 million figure from? I'm genuinely curious, I've definitely looked around for the second number. Also I'd damn well hope the UFC gives a higher percentage, they have over five times the number of athletes under contract, and yet unlike the WWE a lot of their production crew are part-timers.. And again, UFC fighters don't get compensated for being in a videogame, or for any other UFC merchandise outside the Reebok deal, where they lost out massively in losing other sponsors.
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UFC has to file every year for creditors
In 2015 they paid 13% to fighters & that is $80m
WWE numbers are public & while they try to hide any negative numbers & spin (which is normal), people that are in the business of reporting these things (Dave Meltzer, John Nash) find them out

Here is what I was able to find ASAP for you
Dave Meltzer's Newsletter Here’s a few notes on UFC finances and these aren’t estimates but actual numbers. In 2014, UFC grossed $449,008,000 and posted a $73,957,000 profit. That was the year everything went wrong with injuries and such. In 2015, the year Ronda Rousey and Conor McGregor got hot, they grossed $608,629,000 and posted a $157,806,000 profit. As compared with WWE, they grossed slightly less but posted more than six times the profit. It should be noted that doesn’t include interest payments on their loans, which were $22,797,000 in 2014 and $21,767,000 in 2015.

&

Dave Meltzer on his message board was asked what % UFC paid fighters.
He responded:




He gets his info from UFC filings
From Forbes:
According to Dave Meltzer, the foremost authority on the business of MMA and pro wrestling, the UFC posted a $157,806,000 profit off $608,629,000 grossed in 2015, good for a 25.9% profit margin. For comparison, the company profited $73,957,000 in 2014 off $449,008,000 for a profit margin of 16.5%. In other words, the UFC more than doubled its reported profit from year to year.


*Meltzer’s numbers were reported in the most recent edition of the Wrestling Observer Newsletter, which is subscription only, and do not take into account interest payment on loans ($21,767,000 in 2015, per Meltzer) as well as taxes, depreciation and amortization.
 
FrankieNYC

FrankieNYC

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Cagesidelore said:
No way a company like WMEIMG bought the ufc without looking at this. No way they would have bought it knowing that at some point they would be paying millions in taxes & fines & legal fees
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Like I said until WWE gets in trouble, UFC is fine

WWE:
Books IC's 50+ weeks a year & over 200 dates a year
Does not allow any IC to do movies, commercials, TV, interviews without WWE's consent (& a % cut)

There are more examples, but that is far more restrictive

-

Also since a few said they are interested in business discussions

WWE spends $96-99 to make every hundred
UFC spends about $75

WWE has only made $6m in profit the first 6 months of 2017.
Their TV deal is a huge money maker & if not for the TV deal, the others numbers combined will be in the red.
That is why WWE is cost-cutting & panicking, bc their ratings are gone down 25% a year & it is very doubtful UFC will give them the same deal again.
Even though WWE has ratings that are better than UFC's in most cases, wrestling still has a stigma for advertising & brings in a lot less per commercial.
 
Wild

Wild

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blas4ublasphemy said:
I've never understood how the UFC could possibly take away an established avenue of the fighters income without being willing to let dissatisfied employees out of their contracts signed before the policy change. It would be like a diner deciding to keep all employee tips and still paying below minimum hourly wage that was only accepted because the tips are an established element of this type of employment.
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Been saying it forever. The fighters need proper representation and they need leverage. The only way they can get that is to form an association. Why is an association so important? Well for one, the UFC wouldn't have been able to sign the Reebok deal without negotiating with the fighters association first. They also wouldn't have been able to sign up with USADA without negotiating with the fighters association. I'm not sure how the sale of the company would have played out if a fighters association was in place. FrankieNYC @FrankieNYC - you have any input on that? And now with the Fox TV about to expire, and a new deal about to be negotiated that could exceed $500 million...the fighters desperately need a seat at that table.

Look, the UFC can call them independent contractors all that they want. Calling them that is to their favor. But under the current climate, they are employees without the benefits. No health insurance. No retirement plan or pension. No profit sharing. No voice in negotiations.

I honestly can't believe they haven't been able to come together yet. It blows my mind. I thought Jeff Borris would be able to make it happen, but it's been radio silent for months on that front. So I guess they're just going to sit back and get royally fucked when this TV deal happens.

Then the Reebok deal expires in what 2 years? And what do you think a deal with Nike or Under Armour is going to be? A lot. And they won't get a penny of that either.
 
FrankieNYC

FrankieNYC

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Wild said:
Been saying it forever. The fighters need proper representation and they need leverage. The only way they can get that is to form an association. Why is an association so important? Well for one, the UFC wouldn't have been able to sign the Reebok deal without negotiating with the fighters association first. They also wouldn't have been able to sign up with USADA without negotiating with the fighters association. I'm not sure how the sale of the company would have played out if a fighters association was in place. FrankieNYC @FrankieNYC - you have any input on that? And now with the Fox TV about to expire, and a new deal about to be negotiated that could exceed $500 million...the fighters desperately need a seat at that table.

Look, the UFC can call them independent contractors all that they want. Calling them that is to their favor. But under the current climate, they are employees without the benefits. No health insurance. No retirement plan or pension. No profit sharing. No voice in negotiations.

I honestly can't believe they haven't been able to come together yet. It blows my mind. I thought Jeff Borris would be able to make it happen, but it's been radio silent for months on that front. So I guess they're just going to sit back and get royally fucked when this TV deal happens.

Then the Reebok deal expires in what 2 years? And what do you think a deal with Nike or Under Armour is going to be? A lot. And they won't get a penny of that either.
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A lot to discuss

UFC is the ONLY organization to offer injury insurance. If a fighter under contract gets injured in any way away from fight week, they have insurance. BFC owned by a much bigger company does not. That is pathetic.
It is not full health/dental but better than others.

I thought Borris attempt at unionizing was the best bet. He seemed to do it for all the right reasons unlike Bjorn (that imploded fast), but fighters rather bitch on Twitter like an emo then actually do something.
Borris called a meeting for any & all fighters to attend in 2016 & ONE ... I repeat ONE showed up from UFC & that was Leslie Smith.
At that point I said "fuck em" ... if they just want to e-complain, then they will get no sympathy from me.

I remember Helwani did an interview with Kos when he was leaving UFC. Kos went on & on for 3 -5 minutes about a union & Helwani stopped him & asked if he did anything towards getting info, starting one or organizing & Kos (of course) said "no".

I don't think the sale to WME would be affected in any legal way if there was a union.
WME would just have to sign off on existing deals in place
 
Papi Chingon

Papi Chingon

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Independent contractors, can seek employment anywhere at times they are not needed or being used by a specific employer. Independent contractors, can also terminate their own employment.
 
Pitbull9

Pitbull9

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Jan 28, 2015
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Danas own big mouth will solve this as he has said both on numerous occasions. When it suits him they are IC.
 
Wild

Wild

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FrankieNYC said:
A lot to discuss

UFC is the ONLY organization to offer injury insurance. If a fighter under contract gets injured in any way away from fight week, they have insurance. BFC owned by a much bigger company does not. That is pathetic.
It is not full health/dental but better than others.

I thought Borris attempt at unionizing was the best bet. He seemed to do it for all the right reasons unlike Bjorn (that imploded fast), but fighters rather bitch on Twitter like an emo then actually do something.
Borris called a meeting for any & all fighters to attend in 2016 & ONE ... I repeat ONE showed up from UFC & that was Leslie Smith.
At that point I said "fuck em" ... if they just want to e-complain, then they will get no sympathy from me.

I remember Helwani did an interview with Kos when he was leaving UFC. Kos went on & on for 3 -5 minutes about a union & Helwani stopped him & asked if he did anything towards getting info, starting one or organizing & Kos (of course) said "no".

I don't think the sale to WME would be affected in any legal way if there was a union.
WME would just have to sign off on existing deals in place
Click to expand...
Yeah why the Borris led association never got legs is a head scratcher to me. He is THE man to get it done and get it done right. I think a lot of it is fear by the fighters. Afraid of being reprimanded by the UFC. Fear of change. Fear of maybe not fighting for 12-18 months while the thing takes off, or there was a work stoppage. Can't see the forest thru the trees.

Regarding the insurance, yeah it's cool that they are insured if injured while competing but they need health insurance and other benefits. But of course, the UFC won't provide those things because the fighters are "independent contractors". The UFC loves having their cake and eating it too.

The fighters need to form...like yesterday.
 
FrankieNYC

FrankieNYC

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Wild said:
Yeah why the Borris led association never got legs is a head scratcher to me. He is THE man to get it done and get it done right. I think a lot of it is fear by the fighters. Afraid of being reprimanded by the UFC. Fear of change. Fear of maybe not fighting for 12-18 months while the thing takes off, or there was a work stoppage. Can't see the forest thru the trees.
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Leslie Smith never was reprimanded once & she is the most outspoken.
Cain is a DW favorite & he was on the "board" for Bjorn & Cerrone was never hurt by his union talk.

Any fighter that says/thinks that is looking for an excuse.
 
FrankieNYC

FrankieNYC

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Wild said:
Regarding the insurance, yeah it's cool that they are insured if injured while competing
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That is not factually correct
They are insured while under contract
They can have no bout agreement in place & fall off a bicycle & break an arm & be covered.
If thy catch a cold, then they need their own health insurance
Bellator with all their Viacom backing only insures the fight.
 
Wild

Wild

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FrankieNYC said:
Leslie Smith never was reprimanded once & she is the most outspoken.
Cain is a DW favorite & he was on the "board" for Bjorn & Cerrone was never hurt by his union talk.

Any fighter that says/thinks that is looking for an excuse.
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Good point. I don't know why they aren't collectively pursuing it more then. I thought the Reebok deal would be the final straw. Then I thought USADA would be. And I was sure the $4.2 billion dollar sale would be. And still, nothing. I think they are going to deeply regret not doing it now when that TV deal is announced.
 
FrankieNYC

FrankieNYC

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Wild said:
Good point. I don't know why they aren't collectively pursuing it more then. I thought the Reebok deal would be the final straw. Then I thought USADA would be. And I was sure the $4.2 billion dollar sale would be. And still, nothing. I think they are going to deeply regret not doing it now when that TV deal is announced.
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The deal was $3.95b ... $4.2b was an inaccurate report that people hung on to.

Here is the weird thing that Drake @Drake & H @Hardkore can attest to

I am not a fighter & I do not earn more/less if MMA/UFC does better/worse.
The fact that I can find out business figures regarding UFC/fighters & fighters in 2017 still go off half-cocked without facts show why the term "meathead" was invented.

Why fighters & their teams don't care enough to be armed with FACTS & TRUTHS amazes me
 
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