James Krause and Eddie Alvarez

With MMA events stuck on hold indefinitely – except maybe one certain unheralded UFC event – fighters have more and more frequently taken to podcasts, streaming platforms, and Instagram Live chats to pass the time in quarantine.

A more recent one of these chats happened to be an Instagram Live between former UFC lightweight champion Eddie Alvarez and current promotional welterweight James Krause, where the two popular athletes discussed their investment strategies and gave away a combined $1,000 to fans amid the novel coronavirus (COVID-19) pandemic.

While most of the discussion centered around books to read and real estate investing tips, both professional MMA athletes gave some insight into the business of fighting and the misconceptions about fighter pay.

“Fans, I don’t think fans understand or grasp how difficult it is to make… just six figures in the sport,” Alvarez said. “They see you on TV, they see how popular you are, and immediately they go, ‘Oh, he’s popular; he must be rich,’ and that is so far from the truth, especially with us fighters.”

While Alvarez, who now competes for Singaporean-based promotion ONE Championship, didn’t say how much he was making currently, he and Krause both revealed that in their first couple of professional fights, they actually ended up losing money – essentially, paying out of pocket to fight – due to the fact that the athletes had to pay for their own medicals before getting in the cage.

Alvarez also stressed that “[This] sport is an opportunity, not a career.” As such, both emphasized the importance of looking beyond fighting to build wealth.

According to Krause, he’s never felt that his profession has given him a sense of financial security, but said that may be more attributable to his personality than anything.

“I’ve never felt a sense of security through money that I’ve made in MMA… That’s not a knock on the UFC, I [just] don’t like counting on other people to pay me,”  Krause said. “I still don’t support myself off of fight money; I support myself off of real estate and my businesses that I have.”

That’s not to say that Krause isn’t always looking to increase his paycheck from the promotion. As he sees it, there are two possible paths to making money in the UFC: have a name that draws people in, or know how to properly negotiate with the company.

“What I am good at [is that]… I know the game well,” said Krause.

The 33-year-old then went on to elaborate exactly what he meant, describing how he handled the business side of things with his recent fight against Trevin Giles at February’s UFC 247, which he took on just 18-hours notice.

“I knew that one fight had already dropped off [of the card], and there was an open slot on ESPN. I know that [the ESPN partnership] deal is huge to [the UFC]… ESPN has a certain amount of slots, so they need to fill that slot, especially against a guy that is from the area that I was in. So, I knew that I had a good opportunity there, and I was willing to step up on short notice, and I said, ‘This is what I need to do it, take it or leave it.'”

While he wouldn’t give exact numbers on what was negotiated, Krause stated that he not only doubled his original contract, but now makes more than some of the top-ranked fighters in other divisions. That also apparently didn’t include a locker room bonus he was set to receive from the UFC for stepping in to save the fight on such late notice.

“I won’t give you the numbers, but they pretty much doubled my contract and I’m supposed to – I haven’t gotten it yet—but I’m supposed to get a nice check in the back,” remarked Krause. “I’m making more than some of the top-five guys in certain divisions, I know that for a fact… I fight like twice a year, and I’m not even ranked.”

He made sure to emphasize, however, that he doesn’t feel as though the promotion did him a favor or vice versa, that this was purely a business transaction.

“I didn’t do them a favor, they didn’t do me a favor,” he said. “I fought on short notice, they took care of me. And it’s win-win, it’s a win-win situation for both of us.”

According to Alvarez, Krause’s mentality is the “safe play” given the way the business works. He also praised Krause for his shrewd tactics and finesse, something that others in the business could learn from as an example.

“That’s so valuable for any young fighter that’s listening out there,” said Alvarez. “James is honest with himself, he knows himself, he knows his value and what he brings. He created leverage, he put himself in a leveraged position to negotiate.

“You couldn’t be better with your decision to do that, because most people would just say ‘I’m gonna wait for something to happen,'” continued Alvarez, “Instead, [Krause saw] a position of leverage and negotiated at the position of leverage.”

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