By: Drew Hawley
Introduction
We have become accustomed to calling our favorite leagues by initials. The NFL, NBA, and the NHL are the lead examples of this idea, and a new sport has joined them in this very exclusive club, and that organization is the UFC. But what is interesting is that these three letters, the U, F, and C, have become so far engrained into the minds of the viewing public, that they have become synonymous with the sport as a whole. This is especially hard to accomplish in the current sports landscape, with many other sports trying, and failing, to capture the attention and imagination of the public. So in this paper, I will try to find out how this fringe sport became one of the big boys on the block. I will delve into the history of the league, detailing their highs and lows, from shedding the stigma of “human cockfighting” to becoming a billion dollar entity. I will research their business practice, which helped them get to where they are, and where it may get them in the future. Hopefully by the end of my research, I will be able to see how the UFC became what it is today, and how another fringe sport can do the same.
The Beginnings of the Sport (in the U.S.)
“The concept of taking two men, putting them in an octagon, and telling them they can use any martial art they want transcends all cultural barriers and all language barriers. It doesn’t matter what color you are, what country you come from or language you speak, we’re all human beings and fighting is in our DNA.” Dana White
The UFC has become so engrained into the minds of the general public that many believe that it is the name of the sport, but it is not. The UFC is just the most well-known league in the sport, the sport is called MMA, or mixed martial arts. Raul Sanchez Garcia and Dominic Malcolm wrote about the development of the sport for the International Review for the Sociology of Sport, track how the sport has changed throughout the years. The two define mixed martial arts as any “activity which entails an amalgram of un-armed combat styles though different forms of MMA place different emphases on the specific combination of standing striking techniques (from disciplines such as boxing, karate, kick-boxing, kung-fu, taekwondo, thai-boxing, savate) and grappling techniques and fighting on the ground (from disciplines such as judo, greco-roman wrestling, sambo or Brazilian jiu-jitsu).” What the two are stating is that MMA is a mixture of multiple fighting styles, in a competition to see who has the more range of skills.
MMA is something that is not new to this world, the start of the sport can be tracked to 648 BC. This part in the history of the sport was reported by Jan Dutkiewicz and Jeremy Keehn in the Canadian magazine The Walrus, wrote about the emergence of the sport in Canada, and wrote aboout the ancient Olympiad sport known as pankration. The idea of pankration was that it “pitted nude, unarmed combatants against each other in no-holds-barred matches that lasted until someone submitted or was knocked out, severely injured, or killed” (Dutkiewicz and Keehn). Pankration is a far cry from the sport we see today, but the basis for the two sports is undeniable.
The formation of the sport that we see today began to form in the early 1990’s, and the vision of one man. That man was Rorion Gracie, who wanted to prove that his family’s style of jiu-jitsu (Gracie jiu-jitsu) was the greatest form of martial arts. His idea was for a one night tournament that pitted many different fighting disciplines against one another. Teaming with Robert Meyrowitz, Gracie created the Ultimate Fighting Championship, which had few rules and was a glorified street fight in a cage. His vision was realized in Denver, Colorado on pay-per-view. Later retitled UFC 1: The Beginning, the event was held on November 12, 1993, and the sports landscape changed forever.
The Ever Growing the Growing Controversy of the Sport
“a brutal and repugnant blood sport . . . that should not be allowed to take place anywhere in the U.S.” Senator John McCain.
After the mitigating success of the first UFC event (attaining a buyrate of 86,000), the one-time event became a new sport that caught on because of the interest of its audience. This led to follow up events spread throughout the next year, which continuously fed into its growth. While the early success of the company was a shock to many, Meyrowitz included, there was clearly a glass ceiling based on how the sport was run. In the article Money and the Mayhem, Greg Hudson writes about the UFC’s business future in Canada, in which he also details the early history of the company. He writes that the “UFC was originally a less-polished beast, a kind of professional street-fighting league with few rules or regulations, and surviving on shock and juvenile curiously.” While this model worked to get attention for the sport, it wasn’t sustainable for the long term. It was clear that the sport was existing in a bubble, and that bubble was going to burst.
Opposition from the sport was almost immediate. Government officials in Colorado began investigating whether or not the athletes could be charged with a crime, and continuously pressed the FCC (Federal Communications Commission) to withhold the television fees that the company could earn from their events. All of this was due to the culture that the sport catered to, which was almost akin to a fight to the death, instead of two athletes showcasing their skill set. Hudson believes that “the UFC was a victim of its own gore. In its early days, there were no weight classes, no time limits, and only two banned moves: eye gouging and biting.” Under these rules, the company faced the pressure and heat that could be compared to the depths of a thousand suns, including opposition from a very powerful man.
That pressure came from the Senator of Arizona, and future/former (not sure which applies here) Republican presidential candidate, John McCain. Dubbing the emerging sport “human cockfighting,” McCain worked to get the events pulled from television. Believing that the sport “appeals to the lowest common denominator in our society,” he worked long and hard to see that this burning flame would be eextinguished. He pressured many of the cable companied to drop the events, which many of them (which included TCI, Cablevision, Time Warner, Viewer’s Choice) followed his orders. This cut the UFC off at the knees, and robbed the company of their main stream of profits. McCain also petitioned governors around the country to ban MMA in their states, which many agreed to do.
While some of McCain’s extreme lobbying the sport may have been something he was morally opposed to, he also had an interest that drived his hatred forward. Find source detailing McCain’s interests in boxing.
All of McCain’s tactics worked, which by the end of the decade left the UFC nearly bankrupt, and the sport as a whole on life support. All of these attacks led to the UFC institute a stricter rule set, the damage was already done.
Enter Dana White and Zuffa (The Men behind the Success)
“Me and my partners love the fight business. We love mixed martial arts. We bought this thing for $2 million when nobody wanted to touch this thing with a ten-foot pole. It was the last thing.” Dana White.
• Info about Dana white and Lorenzo Fertitta
• Background info on both men
• Changes they have made to the sport (regulations)
• End on their business strategy
In 2001, amateur boxer Dana White gathered two investment partners (Fertitas) and purchased the UFC organization from the former owners. White saw television as the ticket to propelling his promotions for the UFC in 2001. His goal has been to market the UFC and gain mainstream exposure through television.
In 2001 amateur boxer Dana White and casino moguls Lorenzo and Frank Fertitta purchased the UFC and raised the profile of the sport by adding rules to protect the fighters and having it sanctioned by athletic commissions. The result is that 34 states now allow mixed martial arts competitions. The recent rise in popularity of mixed martial arts has been fueled by televised cable programs
Then in 2001, fight manager Dana White came along with Las Vegas casino executives Frank and Lorenzo Fertitta and bought the UFC for $2 million. The trio enforced new rules, added weight classes and a unified fighting style, and injected a healthy dose of rebranding. The sport soon grew beyond its base in Sin City and, one by one, the states and provinces that outlawed it as “human cock fighting,” began to embrace its surging popularity and money-making potential. Today, according Io a report by consulting firm HR&A, UFC events typically generate $23 million in economic output, and $4 million in provincial and federal tax revenues.
The disrepute began to change in 2001, when the Unified Rules of Mixed Martial Arts were established in New Jersey, the first of many jurisdictions to adopt them. Among other strictures, the Unified Rules prohibited thirty-one especially violent actions, including headbutting, eye gouging, and striking the groin, spine, or back of the head. This made the sport friendlier to advertisers and, crucially, to legislators.
The new owners began an arduous process of rehabilitating the company’s image by further increasing safety measures and working with states to lift their bans. But news coverage was slim, and pay-per-views didn’t sell. By 2005, the UFC was $44 million in the hole, and the Fertittas were covering expenses from their personal accounts. They decided to take one more chance.
Business strategy
“We felt like we had a better product than boxing. It was the next evolution. But it was as much about the brand as anything.” -LORENZO FERTITTA (UFC CEO).
“We were literally traveling around the country in vans and flying. We would fly to one city and then go from city to city in vans, and we would go out and do PR and just promote.”
“When you think about streaming on your phone, are you really going to watch Pirates of the Caribbean on your phone? No. But you can watch UFC fights and the best knockouts of the day and a lot of clips and our stuff. So I think that’s how we really built the sport.” The reason that we went after television and wanted to be on free TV is to build PPV and build the sport.
The UFC’s efforts to provide big championships and rival matches on pay-per-view channels, along with the success of The Ultimate Fighter reality series on Spike TV, have resulted in consistent growth in television ratings. In fact, UFC television events now draw better cable ratings among key demographic groups than NBA, NHL and MLB games, and recently established the pay-per-view industry’s single-season record by generating more than $200 million in 2006 in the US (Hamilton, 2006; Scelfo, 2006; Trembow, 2007; Wertheim, 2007).
The number one aspect of MMA that fans find most entertaining is the skill of the fighters (90%). They also enjoy the range of talent and abilities (81%), the fighting styles (82%), the techniques and moves (82%), and the competition of it (73%). Fans reported being less entertained by seeing someone get hurt (15%), the blood (13%), the violence (17%), or watching the men beat up each other (19%).
Mixed martial arts viewers are mostly young, educated, Caucasian single men who are not hypermasculine and do not take unnecessary risks. This profile contradicts the general assumptions about those who enjoy viewing a combat sport in which competitors are frequently hurt and the goal is to knockout or submit their opponent.
In a decade, the UFC turned what was essentially a no-holds-barred spectacle banned throughout the country into a sanctioned sport with mass appeal. MMA is now one of the country’s fastest-growing sports. And the UFC has become one of the world’s most valuable sports franchises, with annual revenue approaching $600 million, according to one of its owners- and a worth, if you believe the smoke signals, of more than $2 billion. That’s more than the New York Yankees, more than the New England Patriots, more than Real Madrid. And there’s seemingly more to come. In 2011, the UFC signed an unprecedented $700 million deal to air fights in prime time on Fox, the goal being to turn fringe fans into “casuals” and casuals into hardcores. Fight sports have been extremely rare on prime-time network TV since the 1980s.
So the UFC produced the show on its own for $10 million, gave it to Spike for free, and spent another couple million on ads and billboards. The Ultimate Fighter became the highest-rated show outside of WWE to ever air on the men’s network. More than 2.5 million people watched the first season finale between fighters Forrest Griffin and Stephan Bonnar. As Fertitta and White left the arena that night, Spike execs grabbed them and drew up a deal on the back of an envelope for two more seasons of the show, plus other programming. The UFC quickly went on to pass the WWE- and HBO boxing- in pay-per-view audience.
It already has a robust pay-per-view system; a successful event can notch 700,000 buys at around $50 each. (This is also why the UFC partnered with Xbox Live, which, with 40 million subscribers, is one of the largest pay-per-view platforms in the world.) The UFC stages at least one pay-per-view a month and, during each event, airs a few preliminary fights on Facebook and a few more for free on cable TV These might scoop up some casual viewers one night, but the real prize is in the future: A broad base of fans won’t have to pay to see the UFC’s lower-tier fighters. If those fighters graduate to pay-per-view events, the fans are more likely to follow.
The first Fox event drew 5.7 million viewers, but that number has slipped since. A Fox show in August drew 2.4 million (though it was up against the Olympics). Still, the network seems excited by the potential. “We’re going to go through a wall for them and they’re going to go through a wall for us,” says Eric Shanks, president of Fox Sports, “and that’s a rare thing in the sports business.”
White often crows that MMA will soon be “the biggest sport in the world,” and you can see why he’s excited: UFC programming now reaches more than half a billion homes in 175 countries and in 22 languages.
What the Future May Hold for the UFC
“the way that we see this thing is it’s the most viable sports franchise on the planet right now.” Dana White.
I doubt anybody knew how big the sport would get in 1993. With so much going against its eventual success, including its image, competition from other sports, and an economy in a recession, there was a lot going against the UFC. But with a winning business formula that caters to the perfect audience and demographic, has been the key to success. Having the right man at the helm, Dana White, hasn’t hurt matters either. White and his partners figured out the map to success, and one that other sports could probably follow.
Senator JOHN McCAIN (Republican, Arizona): They have cleaned it up – the sport, at least in my view that it’s not human cockfighting anymore. I think they’ve made significant progress. They haven’t made me a fan but they have made progress
We’re breaking records, not only all over the country but all over the world. Usually, we’re number one. The Rolling Stones are number two in live dates. When we put on one of these live events, we get 18,000 to 20,000 people.
Yes, the way that we see this thing is it’s the most viable sports franchise on the planet right now.
Think about this. Right now, the NFL — there’s nothing bigger in this country than the NFL, OK? I don’t care if you didn’t watch one football game all season. Everybody watches the Super Bowl. And they’ve been spending billions of dollars to try to break into Europe and all these other countries.
Nobody cares about football in these other countries. They didn’t grow up playing it. They don’t understand the rules. They’re never going to be invested in the teams. People in London don’t care about the New York Giants or the New England Patriots.