When UFC announced its $7.7 billion, seven-year deal with Paramount, the sports world reacted incredulously, not due to the economics but due to the move away from pay-per-view. However, for anyone who has studied the economics of live events, it was an inevitable transition. PPV has always been a high-risk, high-reward gamble — closer to selling concert tickets than the stable broadcast deals of major leagues.

PPV is even riskier than ticket sales. Promoters at least get signals from early ticket sales to adjust marketing spend. With limited supply and professional resellers willing to absorb some of the exposure, ticketing has largely bounded risk. PPV, by contrast, sees most buys come just hours before an event, forcing heavy national marketing spend while limited audiences constrain sponsorship. Even UFC’s biggest PPV — Khabib vs. Conor McGregor in 2018, which grossed $180 million — peaked at only 2.4 million buys, less than one-tenth of an NFL playoff audience.

The only way to sustain that risk is to share it, and fighters are the biggest cost. Just like artists in live music, fighters have historically shared directly in PPV revenue. However, as an event becomes more certain to succeed, their ask grows. Artists like Bruce Springsteen are known to command as much as 95 percent of gross ticket sales with million-dollar guarantees. Floyd Mayweather set new standards with $100 million guarantees — and twice took home more than $250 million once his share was added. No one could guarantee that kind of........

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