The Art of Negotiation

I am by no means an expert in MMA. I am a casual fan, who enjoys watching the events when possible, and like reading and listening to people who are involved in the sport. I could listen to Bas Rutten and Joe Rogan discuss Martial Arts and tell related stories all day. I like the parity, hype, and the fighters who let their personalities shine through.

One of the hot button issues at the moment is the Reebok deal the UFC signed last year. I won’t get into that, but it does play a part in what I do want to discuss. However, by most accounts it only benefits the very upper-echelon of fighters, and you can see some of the criticisms here.

Just yesterday, arguably the sport’s biggest star, Conor McGregor, announced his retirement via Twitter. Obviously this is a huge announcement in the lead up to his rematch with Nate Diaz at UFC 200. The UFC responded quickly, and in typical fashion, it seemed all about damage control. However, from what I can tell it went down like this: Conor asked for $10M for the fight; Dana White and the UFC said no; Conor said yes, or no fight; Dana White and the UFC stood their ground; Conor refused to do any press until his demands are met; Dana White/UFC took him off the card; and Conor announced his retirement. Again, this is how I interpret it.

I think this is a great situation to examine in regards to negotiation and who holds the power. As previously mentioned, McGregor’s meteoric rise to fame has put him at the top of the sport. TV shows and podcasts beg for him to be a guest as he always seems to drop headline worthy quotes, whether promoting a fight or just discussing the MMA landscape. The UFC on the other hand is by far the biggest organization in the sport, and makes insane money off PPVs, merchandise and many other channels.

So who holds the power here? Its apparent both sides think they do, and to be fair, both sides have a case. McGregor and the UFC are looking out for their best interests. Although, McGregor has a contract with the UFC, he has other avenues of income: opening a gym, sponsorship’s, pro-wrestling (don’t laugh, ask Brock Lesnar; half the time, twice the money), and TV commentator. The UFC will also make other stars, they have in the past, and they will in the future.

I think McGregor holds the power here. Sure the UFC has other stars, and can/will make more. However, who have they had recently that is as popular as McGregor? Jon Jones gets eye-balls but he also has had numerous run-ins with the law. While getting PPV buys from people who want to see you lose is still money, you aren’t selling merchandise. McGregor has an entire nation behind him, but that’s not all.

Conor McGregor gets the casual fan involved. People who have never watched an MMA event in their lives see or hear him and are drawn in. He immediately makes an impact. The UFC is like any sports organization, they know they will always have their hardcore fan base that will be there no matter what. To make the big money, and keep the profits coming, you have to find new fans and draw in casual fans. McGregor does that, and does it well. He shows up on ESPN or Fox Sports and all those people waiting for baseball, basketball and hockey highlights see him and get drawn in. Not all of them, but enough.

The UFC has a stable of name guys who are well-known, but none could draw in new fans like McGregor. His charisma, attitude and trash-talk cannot be matched by any of them, and that’s why he holds all the power here. I like this move by McGregor, he has many other options, while the UFC cannot run out another guy who can touch his marketability. I will be interested to see how it turns out, but considering how much money the UFC makes, especially off McGregor, I say pay the man and continue the ride.

 

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