Moving the Needle in MMA: On the Marginal Revenue Product of UFC Fighters

Posted: 29 Nov 2018

See all articles by Paul Gift

Paul Gift

Pepperdine University, Graziadio School of Business and Management

Date Written: October 28, 2018

Abstract

This paper analyzes fighter marginal products (MP) and marginal revenue products (MRP) for the largest component of 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 sizeable 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 infra-marginal consumer base is also discussed.

Keywords: Marginal Revenue Product, Mixed Martial Arts (MMA), Pay-Per-View Buys, Ultimate Fighting Championship (UFC)

JEL Classification: J44, L83, M59, J24

Suggested Citation

Gift, Paul, Moving the Needle in MMA: On the Marginal Revenue Product of UFC Fighters (October 28, 2018). Available at SSRN: https://ssrn.com/abstract=3278444

Paul Gift (Contact Author)

Pepperdine University, Graziadio School of Business and Management ( email )

6100 Center Drive
Los Angeles, CA 90045
United States

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