Today's edition of the Financial Times newspaper featured MMA, primarily UFC, and focuses primarily on the financial aspect of the sport. It also had a picture of the Coleman-Bonnar fight at 100 among other things.Article
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Caged violence lands a fistful of dollars
Published: July 15 2009 20:04 | Last updated: July 15 2009 20:04
Michael Bisping did not know what hit him. The fighter from Manchester had just been floored by a stinging right hook from Dan Henderson a beefy, flat-nosed American who, for good measure, followed up with another violent blow to the face while Mr Bisping lay motionless on the mat.
It was a spectacle that many would have found sickening. But for the 13,000 screaming fans in the Mandalay Bay arena in Las Vegas, the brutality on display was what they had paid hundreds, and in some cases, thousands of dollars to see.
Welcome to the world of Ultimate Fighting Championship, a mixed martial arts (MMA) contest that last Saturday celebrated its 100th broadcast event. From relatively humble beginnings when it was shunned by media companies and attacked by politicians, UFC has become one of the US’s fastest-growing media properties thanks to careful management of its broadcasting rights and a ruthlessly efficient promotions strategy.
Privately owned by three high school friends, the brothers Lorenzo and Frank Fertitta, and its president, Dana White, UFC has tapped into a growing public appetite for violent sport. Its marquee fights take place in a cage called the “Octagon” and are broadcast live in the US via pay-per-view on satellite and cable television, and regularly outstrip boxing title bouts.
Last Saturday’s event is expected to have generated more than 1.3m pay-per-view sales, with each buyer paying $44.95 to watch three tightly contested bouts. It was broadcast live or nearly live in 70 countries.
UFC’s success and the willingness of the public to pay for televised fights is in no small part due to Mr White, the company’s president. Stocky, shaven-headed and prone to expletive-laden outbursts, the former amateur boxer owns 10 per cent of the company and is in charge of day-to-day operations.
Mr White is also UFC’s public face, signing fighters to exclusive contracts, negotiating deals with an array of heavyweight sponsors that include brewer Anheuser-Busch, the US army and Harley-Davidson, and fronting The Ultimate Fighter, a weekly UFC reality television show on Spike, a Viacom-owned cable channel.
“We think this is going to be the biggest sport in the world,” he told the Financial Times before the start of Saturday’s event. “If you think about the NFL, there’s nothing bigger in the US. They are spending so much money trying to grow it in Europe but no one in Europe cares [about American football]. We put two guys in the Octagon and it’s something that everyone around the world understands. Fighting is in our DNA.”
His confidence is borne out by UFC’s meteoric growth. SNL Kagan, a research and consulting firm, estimates that UFC generated $40m in pay-per-view sales in 2005, increasing to $270m by 2008. Lorenzo Fertitta told the FT that he expects the company to generate revenues of more than $300m in 2009, with first quarter revenues up 41 per cent.
UFC also has one of live sporting events’ highest average ticket prices of $276. Front row seats at UFC 100 were going for more than $10,000 a piece on the secondary market, although most tickets usually range from $75 to $1,000.
Deana Myers, a senior analyst with SNL Kagan, says UFC is the most lucrative pay-per-view property in the US, making more money each year than boxing. “They’re generating a huge amount of pay-per-view buys compared with boxing,” says Ms Myers. “Boxing doesn’t have the talent that it used to have when Mike Tyson was around. UFC has positioned itself well and has a huge fan base.”
Yet the competition came close to imploding in the years after it was launched in 1993. It achieved instant notoriety after its first contest, when one fighter was punched so hard that his teeth flew out of the cage. Senator John McCain, an early critic, called the sport “human cockfighting” and worked hard to have it banned.
Lacking legitimacy and commercial appeal, the brand began to struggle and in 2001 it was bought by the Fertitta brothers for a knock-down price of $2m.
Mr Fertitta says the first four years were “rough” and they have invested more than $40m since purchasing UFC. Mr White says the company had to secure legitimacy before it could grow commercially. “The old owners would put the fights on where there were no sanctions, so eventually Senator McCain went to the cable companies to get it banned,” he says. “When we bought it we decided to do things differently. We ran towards regulation.”
When Zuffa, the Fertitta-owned holding company, bought UFC, the competition was banned in 45 states. Mr White introduced new rules to shake off the infamous “no-holds barred” tag and now UFC is sanctioned in 40 states.
Embracing regulation was a sound commercial decision, adds Mr White. “This many people want to see a freak show,” he says, holding his hands a short distance apart. Then he opens his arms wide. “But this many want to see a sport.”
UFC may have been toned down from the days when anything was permissible apart from eye-gouging, but it is still a violent sport. Strikes with the knee and elbow are acceptable, as are choke holds that can render fighters unconscious.
There were plenty of fighters in need of medical treatment on Saturday: the first two bouts ended when the losing fighters passed out and needed to be revived. By the end of the evening, the mat in the Octagon was covered in blood.
The clash between Brock Lesnar and Frank Mir was the evening’s most hotly anticipated fight. With a neck as thick as a tree trunk, Mr Lesnar, a former college wrestling champion, used his superior weight to pin Mr Mir to the mat while striking him in the face, a technique known as “ground and pound”. By the fight’s swift conclusion, Mr Mir’s face was a bloody pulp.
Mr White argues that UFC is no more or less dangerous than other contact sports and he points out that no one has ever died fighting in UFC, unlike boxing.
The violence is also inherent to UFC’s appeal, helping it defy the recession and steal fans from the fake theatrics of World Wrestling Entertainment.
“There has been a shift away from staged wrestling towards the realism of UFC,” says Ms Myers.
The business model also differentiates the sport. Unlike boxing, where fight promoters work with broadcasters and arena owners, UFC has complete control over its commercial activities. This seems to have worked in its favour. “A boxing promoter like Don King will do the deal to get the fight staged and that’s it,” says Mr White. “The venue will stage the fight and sell the tickets and a TV company like HBO will sell it on pay-per-view. We rent the arena, we sell our own tickets, we put it on pay-per-view ... we risk everything every time we put on a show.”
Mr White controls UFC with an iron grip. He forced a chastened Mr Lesnar into a humiliating apology after Saturday’s bout after the fighter said he would not be drinking Bud Light – one of the event’s sponsors – “because they don’t pay me nothin’”.
Mr White’s success with UFC has also spawned imitators. Elite XC, a rival MMA group, enjoyed a brief spell in the spotlight last year when it signed a deal to broadcast bouts on the CBS network. But the company burned through cash and despite attracting large audiences, it staged only three events for the network.
A key moment was the 2005 launch of The Ultimate Fighter , which follows 16 fighters battling to win a six-figure UFC contract. Mr White calls the show UFC’s “Trojan horse”. Before it launched, UFC’s pay-per-view fights would do well if they exceeded 100,000 sales. Thanks to the programme, interest has exploded.
“They have done a great job building a brand and awareness via their show on Spike,” says Mark Cuban, owner of HDNet, which broadcasts rival MMA events. “They then leveraged that into an enormous following, which in turn led to the great pay-per-view numbers.”
Mr Cuban adds that UFC “absorbed a lot of losses” to achieve its dominance. “It won’t be easy for other promotions to compete with the UFC, but it’s certainly possible,” he says.
Rivals are also cropping up internationally – Japan, for example, is a hotbed of MMA. But UFC’s international appeal is also growing, and fights have been held in the UK and Germany. One event last year in Montreal attracted 21,000 fans, the largest audience for an MMA fight in North America.
UFC is televised in 100 countries and broadband expansion could allow the group to broadcast global pay-per-view events using its own web-based platform.
“When everyone can watch TV on the internet, how many pay-per-view buys do you think we’ll do?” says Mr White. “Four million? Five million? We can take this all over the world.”
good read but it's nothing we haven't heard before. however, it is good to see MMA being recognized by all of these different facets of the media.
Dan Henderson is beefy?
The teeth in the first fight flying were from a kick, not a punch.
5 fights are on the main card.
How do they get away from not investigating what they're reporting about