Moving the Needle in MMA: On the Marginal Revenue Product of UFC Fighters
Journal of Sports Economics, Vol. 21, Issue 2, pp. 176-209, 2020
Posted: 29 Nov 2018 Last revised: 11 Jan 2021
This article analyzes fighter marginal products (MP) and marginal revenue products (MRP) for the largest component of Ultimate Fighting Championship (UFC) revenues: content. Most bouts are fought in the presence of fixed content revenues, and most fighters go their entire careers without supplying labor services for variable revenue pay-per-view (PPV) main cards. After demonstrating that winning does not sufficiently explain variation in PPV buys, I estimate fighter MP and MRP using U.S. consumer search activity from Google Trends as a proxy for fighter popularity. Results suggest that a sizable percentage of UFC fighters generated little to no MRP, while a small number of PPV main card fighters were responsible for 75% of aggregate MRP. Other PPV main card fighters who did not drive the majority of MRP appeared to generate more than some compensation estimates. An apparent decline over time in the UFC’s inframarginal consumer base is also discussed.
Keywords: antitrust, marginal revenue product, mixed martial arts (MMA), pay-per-view, Ultimate Fighting Championship (UFC)
JEL Classification: J44, L83, M59, J24
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