Zuffa's WEC Problem
Most problems begin with poor judgment. Tim Sylvia let Monte Cox talk him into fighting Ray Mercer. It was a fight the former UFC Heavyweight Champion should have never even considered. He had nothing to gain from it and now following his embarrassing knockout loss, Sylvia's stock is subterranean. He made a bad decision and created a problem for himself. It usually works this way.
Zuffa has another sort of problem with a different cause. In December, it will be the three year anniversary of their WEC purchase. At the time, it did not seem like a major deal. The WEC was a minor MMA promotion with little fanfare attached to it. Zuffa's biggest move was to bring the 135 and 145 pound weight classes to the forefront. Since they became the focus, the promotion has grown significantly. The lighter fighters are very active in the cage and it makes for some of the best fights you'll see anywhere in the world of MMA. This great idea by Zuffa led to their current problem, which is their biggest WEC stars want to be paid like their UFC brethren.
Urijah Faber has been particularly outspoken about the issue. He recently told MMAWeekly, "I feel like I'm making a pretty good name for myself and I'd like to be compensated for this." It's hard to argue with his logic. Faber is the WEC's biggest star, yet for his recent main event fight with Mike Brown, he only made $35,790 ($25,790 to show plus $10,000 bonus for Fight of the Night). To give you an idea of how low this is, Chris Lytle made $18,000 to show against Kevin Burns at the Ultimate Fighter 9 Finale last month. As always, reported salaries are not the actual totals fighters make. For some ridiculous reason, MMA promotions still get away with not releasing the actual salaries. Still, the fact Faber and Lytle are only separated by $7,000 is troubling. Faber is a main event fighter who brings in an audience whenever he fights. Lytle is a journeyman. Their salaries should not be this close.
The WEC simply does not have enough revenue yet to pay large salaries to their biggest names. The UFC makes the bulk of their money with PPVs. There are other revenue streams from advertising, merchandising, and live gates, but the majority of their money is PPV related. For the WEC, their revenue is mostly based on their live gates. WEC 41, which featured Brown vs Faber sold 13,027 tickets and brought in $818,415. It topped their previous high by $70,000. Their events do not always bring in that much money. In fact, last December at WEC 37 (headlined by Miguel Torres), the gate was only $90,125, while the salaries totaled $219,000. This isn't to say they're struggling. Most events bring in a profit, but when you factor in the money spent on marketing, arena fees, and employee payroll, there isn't an enormous amount left. Any increases to salaries would not be drastic at this point.
The good news is the promotion continues to grow and it's only a matter of time before they put together a PPV. The additional PPV money will lead to the type of increases it'll take to keep their top fighters happy. The WEC definitely has a problem, but it's not a bad one to have at all.