Are underdog UFC champions worth betting?

Nicco Montaño won The Ultimate Fighter tournament to be UFC's inaugeral women's flyweight champion. Brandon Magnus/Zuffa LLC/Getty Images

When Nicco Montaño enters the Octagon at UFC 228 for the co-main event against Valentina Shevchenko, she'll do so as the inaugural women's flyweight champion. But her first title defense is notable for another reason: She's a massive betting underdog, despite possessing the belt.

It's an unusual position for the betting market to give very little chance for the incumbent champion to successfully defend a title. In fact, incumbent champions since 2005 were favored in 85 percent their title defenses, with an average closing betting line of minus-235. The market clearly favors champions over challengers.

Underdog champions aren't just scarce -- when they do occur, they are rarely big underdogs. Only five times since 2005 has a champ been more than a 2-to-1 underdog. What's more remarkable is that those fighters went 3-1 with one loss overturned to a 'no contest.' Among the top 10 least favored champions, they won six of their fights in an upset.

And of the 25 times an incumbent UFC champion was the underdog, they pulled off the betting upset in over half of those fights, leading to a significantly positive betting ROI. The sample size is small, and most of the wins came when the incumbent was just a mild underdog, but still it suggests that occasionally champions get less respect than they deserve.

The odds are good, the goods are odd

One camp says that incumbent champions are proven winners, worthy of betting when a favorite. Another theory counts on the power of promotion, that challengers get inflated betting prices because each main event requires marketing the valid chances of the new blood. Both combine to perhaps explain why incumbent champions tend to outperform when the market has turned against them. But betting on defending champs in general leads to a wash in terms of ROI. So broadly, what can we expect when we see such long odds in a title fight?

First, a look at average betting odds for incumbent champions reveals some interesting findings: not all champs (or divisions) are created equally. The divisions added to the UFC most recently are the women's weight classes and the men's flyweights. These newer divisions see much steeper odds for incumbent champions than more established weight classes like lightweights or welterweights. The "center of mass" divisions in the UFC are considered the most competitive with the deepest talent pool, and so we can expect that even champions are usually facing stiff opposition, and outlier talent is rarer there. And although some of the larger weight classes have also been around since the beginning, light heavyweights and heavyweights see tighter odds due to the inherent volatility of such knockout-prone size.

Overall, incumbent champions in the women's divisions average a 3-to-1 favorite betting line (-300), compared to 2-to-1 (-200) for the men's divisions in aggregate. So, we know odds can get steep in the newer divisions, just not typically against the reigning champ.

UFC 228 is making history

The challenger for the women's flyweight title at UFC 228 is Shevchenko, now literally the biggest betting favorite in a women's title fight by anyone not named Ronda Rousey, Joanna Jedrzejczyk or Cris Cyborg. But the key difference is that Shevchenko is not the incumbent, but rather the challenger. You'd have to go back 10 years to UFC 83: St-Pierre vs Serra 2 to find a title challenger as a heavy favorite. And that's only because it was George St-Pierre returning as a -500 favorite in his successful rematch against Matt Serra, where most saw the initial upset as a fluke.

While history has shown us not to count out defending champions, we also have very little data on Montaño to make any sort of quantitative prediction. Winning "The Ultimate Fighter" tournament is certainly an impressive feat, but she'll now face an opponent in Shevchenko who has been fighting elite competition across multiple combat sports for over a decade. Hence, despite oddsmakers opening the challenger as a nearly a 7-to-1 favorite, market action has pushed her price even further to currently over 12-to-1.

Big finishes

There are other noteworthy trends to look for when there's a betting mismatch. Of the top 25 title fights with the steepest betting favorites, 19 ended inside the distance. So if there's a trend to expect in a potentially lopsided title fight, it's that it's unlikely to go to the judges.

And speaking of big finishes, a Fight Night Bonus was awarded in 12 of the top 25 championship fights with the steepest odds. Eight of those were performance bonuses to the winner (e.g., KO of the Night, Submission of the Night or Performance of the Night), while just four were Fight of the Night Bonuses.

The primary takeaway from a matchup with steep odds, is that there's more likely to be a performance bonus to the winner than a close back and forth fight. And that makes sense. Odds are generally accurate, so either the favorite had some huge advantages over the underdog and were more likely to finish them, or an upset could only be achieved via a spectacular finish. Keep these trends in mind when Zabit Magomedsharipov faces Brandon Davis, as the highly touted Zabit is also running north of a 10-to-1 favorite this weekend.

Odds and ends

Coincidentally, current welterweight champion Tyron Woodley in the main event at UFC 228 has also seen his share of disrespect from the betting public. He competed in three consecutive title fights as an underdog against Lawler and Thompson (resulting in two wins and one draw), only being favored once during his title reign against Demian Maia.

While it's still early in fight week, Woodley's initial odds have dropped from a clear favorite to a dead even pick 'em, and we're projecting that he'll close as a slight underdog to Darren Till come fight night. That may leave some value on the champ should he decide to demonstrate his dominant wrestling skills against the dangerous striker.