There's legends and then there's legends in their sport. Muhammed Ali is a legend in and out of his sport, not many legends like him out there.
For legends in their sport, they have to have fought the best, be loved by their fans and survive the test of time. Their fans still talk about them even after their peaks have passed. Saku for example.
edit: Jon Jones ... even if he isn't loved by fans is still a legend ... argh, messed up my theory.
You average person on the street has no idea who Jon Jones is.
But they have heard of Royce Gracie..
or Conor McGregor.