New Business Model
By Tom Donelson

April 15, 2007 - Boxing business model belongs in the early 20th century if not the 19th century. Contrast the boxing business model, such as it is, to the Mixed Martial Art. Mixed Martial Arts are beginning to experiment with new models that will ensure Mixed Martial arts survival and the continued decline of boxing.

Over the past month, I have delved into Mixed Martial to view its popularity and appeal. As the new sport, Mixed Martial Arts is experimenting with different business models. New Era Fighting is pledging to split the gate with the fighters and the International Fight League (IFL) is using a team concept to pay their fighters.

In the IFL , each fighter is given a monthly stipend and then bonuses are added based on fight performances. Win a match, the fighter gets a bonus. Fastest knockout or submission, you get a bonus. Best fight of the competition and both fighters get a bonus. Bonus begins to add up and as one IFL official stated, “Fighters can earn up to six figures a year.” New Era Fighting is splitting their gates with their fighters. As one New Era Fighting official noted that UCF earns a quarter a million of dollars in revenues and that could certainly produced a bonanza for the fighters if evenly split with the promoters.

The monthly stipend allows many of these fighters to concentrate on fighting. In boxing, many fighters end up working second jobs while training. By allowing a fighter to concentrate on their fighting, these athletes can improve their own skills and stay in shape year round.

What the IFL and New Era are attempting to do is to find fighters competitive to the UCF. If either model succeeds, this could change the dynamic of not just Mixed Martial Arts but boxing as well. First of all, the UCF is where the big stars are located in the Mixed Martial Arts but the IBF and New Era business model are seeking to change that. If these business models succeed, two results will occur.

The first result is that the UCF will have to change their model. If New Era or IBF succeed in attracting better athletes, they could actually challenge the UCF. The second result is that either IBF or the New Era ends up operating as effective minor leagues for the UCF, allowing young fighters to develop and progress before moving to the UCF. This also allow fans to see fighters from the beginning of their careers and give them a rooting interest in their progress. As for the Mixed Martial Arts, the success of either model will allow the fighter to develop while honing their craft full time. The results are better fighters.

In Baseball and Football just a thirty or forth years ago, it was not uncommon for even star players to take other jobs in the off season. With today money, even benchwarmers train full time and the result are better trained athletes.

Another side effect is that many fighters may decide to try their luck at the Mixed Martial Arts as oppose to boxing. If a fighter is forced to choice between a sport that’s guarantee a starting salary that will enable him or her to train or struggle in starting out in another, which sport will attract the better athletes? Unless boxing changes it model on paying fighters, they will lose the better fighters to Mixed Martial Arts.

Boxing can learn from either of these models. Yes, it is nice that some boxers can earn multi-million dollars pay out but does it harm the sport if those at the bottoms can’t get enough money to develop their skills? Would boxing be better off if Oscar De La Hoya or Floyd Mayweather takes few millions less if those millions are spread around to other boxers? Boxing can learn from these models and begin to change the way it pays its athletes.