Have you read Oscar Wilde's 'Lady Windermere's Fan'? Even if the answer is no, everyone is surely familiar with the play's most famous quip: A cynic is "a man who knows the price of everything and the value of nothing" one character says, a theme which runs throughout a lot of the articles in this week's issue
How do you put a value on something? That is the eternal question posed by experts and analysts across the business world. It comes into play when Apple are trying to decide the price for their new iPhone (when they are balancing supply with consumer demand), it comes into play when people are debating salary levels for a new employee and it even comes into play when investors are trying to work out how the price of oil or gold or the Indian rupee will be impacted by the recent drone attacks on Saudi Aramco.
Our cover story this week focuses on the world of Mixed Martial Arts (MMA) and investigates who is really making the money out of this popular sport. Those at the top are certainly earning the big bucks, as Russia’s Khabib ‘The Eagle’ Nurmagomedov reportedly walked away from his recent victory at UFC 242 in Abu Dhabi with $6m more in the bank.
“We aren’t fighting for peanuts,” Nurmagomedov’s father Abdulmanap told reporters. “We know our value.” This goes back to the phrase in Wilde’s famous line: Nurmagomedov knows the value he has and is not afraid to demand what he sees as a fair price in return.
However, while other MMA fighters further down the rankings may know their value too, the price they are commanding is nowhere near the millions earned by the Nurmagomedovs or Conor McGregors of the sport. “They’ll walk away with $1,500… That’s not a lot,” one fighter tells us.
“Why do MMA athletes not live the lives of normal athletes, whether from football, tennis or cricket?” veteran Bahraini fighter Mohammed ‘The Hawk’ Shahid asks Arabian Business. “Why don’t we try give resources to MMA athletes that any other athlete would get to perform at the best of their abilities?”
However, the issue of money and sport is not straightforward. Just take a look at the 2019 Forbes list of the highest paid athletes. Top of the list is Argentinian footballer Lionel Messi with $127m ($92m from salary and winnings and $35m from endorsements). Similarly, in second place is Portuguese forward Cristiano Ronaldo on $109m ($65m from salary and winnings and $44m from endorsements).
But, if you look further down the rankings a few interesting things emerge: At fifth place is Swiss tennis superstar Roger Federer with $93.4m, but his winnings only amounted to $7.4m and his endorsements have to made up the rest. By comparison, sixth placed less known American footballer Russell Wilson earned $80.5m from his salary and only needed $9m from endorsements. A scan down the rankings seems to show that footballers – either soccer or American football – earn massive earnings, while tennis and basketball stars earn much smaller amounts on the court and so need to bulk up their earning power with commercial endorsements.
But why is a tennis star’s winnings so much lower than a footballer’s? When it comes to the gender pay gap the argument gets even more complicated. While Federer earned $93m, Serena Williams – the world’s highest paid female athlete – took home $29.2m over the same time period.
Determining value is also a big issue in our article on the business of art. “Art is more accessible than ever, from affordable works on paper through to masterpieces by modern Arab artists – prices at Christie’s can vary from $1,000 to more than $100m,” Caroline Louca-Kirkland, managing director of Christie’s Dubai says.
You can argue the merits of the value of a tennis player versus a footballer but deciding why one piece of artwork is worth $1,000 and another is worth $100m is an even more complex and controversial debate. But a lot of people make a lot of money out of determining the value of art, so much so that a lot of people also borrow on the back of it.
“By definition, art is the expression or application of human creative skill and imagination. Is it fair to put a price on creativity?” our reporter Shruthi Nair asks at the end of her feature. It’s a fair question I’m sure low ranking MMA fighters and tennis players ask about when they cash their winning pay cheques at the end of a match. At the end of the day, doesn’t everything and everyone have a price, or am I just a cynic?