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 Last update:  6/19/2007       Read more by Zach Arnold            
   
Body Blows For The UFC
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By Zach Arnold

When you are the only game in town in your respective sport, every successful venture and lowly failure is magnified.

UFC is the only top dog in the world of Mixed Martial Arts. There is a reason that the mainstream media calls MMA “Ultimate Fighting” and why the myth of Dana White adding both weight classes and rules to MMA after purchasing UFC exists. To the victor go the spoils, and the victor often is the one who re-writes the history.


Fellow MMA writer and radio personality Jeff Thaler elaborated a year ago on his theory that UFC would run so many shows and garner so much media coverage that the attempt at oversaturating the MMA market would drive away competition.

So far, UFC has been successful in making all of their other MMA rivals look like ham-’n-eggers. However, there is a price to pay when you oversaturate a market and become the singular focus on a very hot sector of the combat sports industry.

For UFC, the increase in intensity of media coverage has been both a blessing and a curse. The company reached its apex in the mainstream media for their UFC 71 event, headlined by Chuck Liddell vs. Quinton Jackson. Sports Illustrated, ESPN, The New York Times, The LA Times, and many other major media outlets covered the event as if it was the Super Bowl of MMA. For the majority of the UFC-related media coverage in May, the focus was on the vaunted ‘boxing vs. MMA’ debate that will seemingly never die. Instead of backing away from this argument, UFC President Dana White embraced it and made sure to get as many verbal barbs in against boxing as he possibly could.

After Quinton Jackson disposed of Chuck Liddell at UFC 71 with a flash knockout, the tide has been slowly turning against UFC. Despite a very large buyrate for UFC 71, there was much media dissatisfaction with how quickly the UFC 71 main event went. For UFC fans, it was a good show. For first-time watchers and casual media observers, they couldn’t understand what the fuss about UFC was after seeing such a short main-event.

With media scrutiny intensified towards UFC, every mistake is magnified to large proportions.

UFC has made several mistakes since receiving enormous media coverage for the UFC 71 event. The first mistake occurred during an NBC Sports interview that Dana White participated in. White was asked by NBC about corporate sponsorships for UFC. UFC is a product that attracts a very strong following in the 18-34 year old demographic, a demographic that sponsors absolutely desire to reach out to. At the time of the NBC Sports interview, UFC’s main sponsors included the following companies: Xyience, Mickey’s malt liquor, Amp’d Mobile, and Toyo Tires. White’s response to sponsorship question in the NBC Sports interview reeked of arrogance:

“I’m cool with Mickey’s and Toyo Tires, man, believe me, you’ll never hear me bitch. The way that we’ve run this business and the way we have come up, think about it… we didn’t have any mainstream press, we didn’t have any mainstream sponsors, and look at how huge we are. I don’t fucking need Coke to keep doing what we’re doing, man. Believe me, the big time sponsors if they come on, of course that’d be fantastic. I don’t need ‘em. 18-to-34 year old males, they’re here hanging out with me. If Coke wants them, Coke needs to come to us. You know, this [UFC] wasn’t bought by smart businessmen.”

It was a curious statement by White to make about a blue-chip sponsor such as Coca Cola, especially considering that Xyience (UFC’s top sponsor) has been a company long-attacked online by negative rumors and innuendo. The issue of blue chip sponsors is a sensitive topic raised by business critics (such as CNBC’s Darren Rovell) towards the growth and credibility of Mixed Martial Arts as an industry. Can the sport transform itself from a niche and a fad to a full-fledged legitimate presence in Corporate America?

After White’s bizarre comments about Coca Cola, karma struck UFC as Amp’d Mobile had to file for Chapter 11 bankruptcy protection. Amp’d Mobile was a sponsor prominently featured on UFC programming, especially on The Ultimate Fighter reality TV show. UFC has been able to replace Amp’d Mobile with Vitamin Water (an upgrade in sponsorship), but the issue of corporate sponsorship remains a legitimate one when it comes to measuring the true growth of UFC’s business.

In addition to having growing pains in obtaining blue chip sponsors, UFC has also faced growing pains in expanding their company internationally. The promotion finalized a deal with Dream Stage Entertainment Inc. for the PRIDE asset sale, but what does that sale mean in the long-run? White has given out mixed signals in regards to the future of PRIDE — if there is any future. As recently as three months ago, Dana White proclaimed that he would do a ‘Super Bowl of MMA’ between UFC and PRIDE. Three months later, White continually refers to the PRIDE situation as a ‘mess’ and most of the top Japanese MMA stars are sitting at home — unlikely to ever work for UFC or work in the fight industry again unless K-1 hires them.

The focus of UFC’s international expansion is not Japan, but rather the UK. The promotion ran a successful event in Manchester, England featuring Gabriel Gonzaga’s devastating high-kick KO of Mirko Cro Cop. Last weekend, the promotion ran their UFC 72 event at the Odyssey Arena in Belfast, Ireland, claiming 7,850 fans in attendance. The show was not a sell-out and there were multiple media reports (from Loretta Hunt of The Fight Network and Neil Davidson of The Canadian Press) stating that UFC had to paper the arena in order to fill up the seats.

The Ireland show illustrates a long-term problem that UFC is facing and having to come up with a solution for right now. Specifically, the long-term problem is how to take their successful casino-based product and consistently draw in a traditional house show market. UFC has had mixed success so far in this department. Because UFC draws so well currently on PPV, the money made on PPV masks many of the problems that the company faces long-term as they try to expand their offices and events globally.

Business-wise, UFC is in a state of flux. They have made some good decisions and they have made some poor ones as well. One of the poorest decisions they made in 2007 is about to play out on a grand stage this Saturday night.

On Saturday night, UFC (in conjuction with Spike TV) will broadcast The Ultimate Fighter: Season 5 finale on cable television. The event will take place at the Palms Resort & Casino with BJ Penn vs. Jens Pulver, the two TUF 5 season coaches, squaring off in a grudge re-match. Before this season’s Ultimate Fighter aired on Spike TV, the promotion made a risky decision to book Penn vs. Pulver on cable television instead of using Spike TV to build the re-match up as a major attraction on a PPV.

The decision to book the fight on cable TV and not on PPV may prove to be a very costly one.

UFC is facing a daunting challenge on Saturday night, right in their own backyard. Top Rank Promotions and HBO are producing a big event at the Thomas & Mack Center in Las Vegas with Ricky Hatton vs. Jose Luis Castillo for the IBF Jr. Welterweight title. The show is expected to be sold out and swarms of media will be in attendance. There will be many Las Vegas media reporters who will be attending this event rather than the UFC event at the Palms. Only the traditional MMA media writers will be in attendance to watch Penn vs. Pulver, a fight that could have made millions of dollars for UFC on PPV. It’s also a fight that could have desparately injected some life into what ended up being a lackluster UFC 72 event that featured one really great match (Tyson Griffin vs. Clay Guida).

The decision to run Penn vs. Pulver in a smaller venue in Las Vegas and to air the fight on cable television instead of PPV is a bad miscalculation by UFC. UFC will likely spin this decision in the media as saying that they are giving fans big fights for free on Spike TV rather than making people pay to subscribe to a premium cable channel or pay $50 for a PPV.

Sorry, I’m not buying the spin. And neither, I suspect, is the local Las Vegas media this weekend.

UFC is paying a heavy price for oversaturating the MMA market with so many shows. By oversaturating the MMA market and by expanding their international operations too fast, UFC is creating holes in their business plan that eventually can be exposed by rival promoters who have both money and brain power. However, UFC’s likely calculation at the moment is that none of their rivals are very smart or adept at taking advantage of the current marketplace situation.

They’re probably right.

No harm, no foul. On the other hand, it’s also an arrogant and risky tactical long-term position for the company to take.

There is a great deal of irony in seeing UFC play second-fiddle to boxing in Las Vegas for this weekend’s upcoming festivities. UFC has been the talk of the town in Las Vegas for a couple of years now. The organization has been thrilled with the mainstream media coverage of ‘boxing vs. UFC’ and whether or not UFC would put boxing out of commission. Dana White has been trigger-happy in attacking De La Hoya/Mayweather in interviews for not delivering the goods.

UFC had a chance to diffuse the tired, played-out ‘boxing vs. UFC’ argument in the media. Instead, they chose to run with it and get as many short-term credibility gains out of it as possible. UFC played the major players in boxing like a fiddle for PR. However, the chickens have come home to roost. A week after running a lackluster event in the UK, UFC will be taking a backseat to an Englishman named Ricky Hatton. The European star is upstaging the American powerhouse in that company’s own backyard.

And the ‘boxing vs. UFC’ argument lives on.

 

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