UFC co-owner Lorenzo Fertitta speaks out in rare interview
Yahoo! Sports: Mixed martial arts surpassed boxing and wrestling in pay-per-view sales and revenue for the first time in 2006. But boxing appears to have overtaken MMA again in 2007. Would you characterize 2007 as a down year for MMA because of that?
Lorenzo Fertitta: We've shown we have staying power. We had a big year in 2005, a bigger year in 2006 and a big year in 2007. Boxing is always going to have its big fights. It's kind of like horse racing. There's always that Kentucky Derby, where one or two times a year everyone is going to watch. That's great. But in general, if you look at the consistency of our performance, I have been very happy with it.
Y!: But it seems like you had some shows in 2007 that just didn't do that well as they had in the past. Isn't that fair?
LF: Not really. I actually look at this the opposite way. One of the greatest successes that we've had, for instance, is the last show we did in New Jersey (UFC 78 on Nov. 17). We had a fight being headlined by two guys who had never fought for a championship and, relatively, had never been proven to be pay-per-view draws. But we basically sold out the arena in New Jersey and we did very strong, above average, pay-per-view. So to me, while it wasn't Liddell-Ortiz, that said more to me than one of what you might call one of our bigger fights did. It showed that our UFC brand can carry a whole show.
Y!: You had said when we spoke at UFC 72 in Belfast that you expected to be able to announce the addition of several significant new sponsors. It's more than six months later and nothing has been announced. Is the reason for this deal because the potential sponsors have had second thoughts about the UFC and where do those deals stand?
LF: There have been no problems at all. I think you'll see that 2008 is going to be a real breakthrough year for us from a sponsor standpoint. These deals take a long time to negotiate. We're confident we're going to have a big announcement in a month or two. The fact that we added Harley Davidson for this (UFC 79) card is a big deal. Sponsorships and advertising, we saw the same thing with The Ultimate Fighter. We had two or three seasons of unbelievable success before advertisers came on board. They're kind of behind a year or two maybe of what reality is. Once we announce some of these blue chip guys, I think everybody else is going to follow. Once you land that one blue chip, it gives you credibility and then everyone else is going to want in. Everybody is looking. Everybody knows we're here. Once we take that first step, everyone is going to pile on.
Y!: You've run into problems recently that you haven't had before. The whole dispute with Randy Couture has put the UFC in a negative light. Tito Ortiz has made comments about forming a fighters' union and hoping the fighters will be treated more fairly. Is this a natural outgrowth of the explosion of the sport and how do you plan to handle what seems to be a growing labor problem?
LF: Our business is out in a public forum much more so than a traditional business would be. Yeah, Randy has come out and made everything very public. And Tito is always talking like that. He's been that way since we've owned this thing. One day we're the greatest and he's super happy and the next day we're not. He's like a roller coaster, so that doesn't concern me too much. Overall, the majority of our guys are extremely happy. We've done a great job of promoting them. One of the things we do is that we invest heavily in the brand. We spend tens of millions of dollars on marketing. We're investing back into the sport. What that does is make everything more valuable for the fighters going forward. They should be happy that we invest back into the sport, because it continues to grow and they can make more money. This isn't a short-term thing.
Y!: You've had to address the whole money issue much more than you ever have. You held a news conference to talk about what Randy Couture was making. You're criticized greatly for the amount the fighters are paid. (At UFC 79) Chuck Liddell is making a purse of $500,000, according to the Nevada Athletic Commission. Floyd Mayweather was guaranteed more than $11 million when he fought Ricky Hatton earlier this month. Why is there such a disparity between what the top boxers make and what the top MMA fighters earn?
LF: You have to understand that the UFC has a completely different business model than boxing. We are in a situation where we're not only the promoter, but we pay for all of the production, where as in boxing, the promoter doesn't pay for any of that stuff. HBO or the network does. We pay for all of the advertising and the marketing. If you're a boxing promoter, you don't do that. You don't come out of pocket. Boxing promoters take no risk up front. They get guarantees from the venue and from the networks, so they take no risk. We underwrite the entire thing. And like I said before, we invest into the sport to try to grow it by doing things like going to Europe. We took major losses in Europe (in 2007). We didn't make money on any of those European shows.
But looking forward five years, we realize that Europe is going to be bigger than the U.S. and a lot of those fighters are going to benefit from the way we've cultivated the European market.
The boxing way is to take a short-term approach, but we're focused on the long term, both for the brand and for the sport.
Y!: But with the explosive growth of this sport …
LF: A lot of people talk about the growth of MMA. I don't believe in that. I don't know where anybody can show me there is this great success in MMA outside of the UFC. There has been explosive growth for the UFC, but MMA in general, nobody is making a breakthrough. The biggest non-UFC pay-per-view, you might know better than me, but it's something like 25,000, maybe 30,000 buys. There is a bit of a misnomer there. It's not the growth of MMA. It's the growth of the UFC.
Y!: There are a lot of successful business people who are getting into MMA. Elite XC has a deal with Showtime. Mark Cuban is one of the richest guys in the world and he's beginning to make a move in MMA. Doesn't it indicate when people of substance like that get involved that the sport is growing to the point where it can be viable long-term as a business?
LF: Based upon our success, as with any business, you're going to get guys who are going to try to be the 'me, too,' person and want to try to hang on and build on the success that we've had. I don't necessarily think that that's a bad thing. There are always going to be others in the business and I respect what they're doing. I understand that. It's our job to stay ahead and continue to be the leader. At the end of the day, a lot of people are going to try to take shots at us. But what I like to say is, 'You can only tackle the guy with the ball,' and we have the ball.
Y!: Where do you stand in the dispute with Randy? How upset were you at the way it played out? What will your next step be to move forward? And do you see yourself getting involved personally to try to straighten out whatever the problem is that exists between the UFC and a guy who has been one of its biggest stars?
LF: I would say … You know, I don't even want to talk about Randy. I'm not being disrespectful, but because of the situation we're in, our attorneys, we're not even going to comment at all about Randy Couture.
Y!: But it can't help your brand to be at odds with a fighter who is so popular and whose nickname is Captain America, can it?
LF: I just can't say anything about that topic now. The situation is such that it's best that I don't say anything at all at this point.
Y!: The UFC president, Dana White, has become one of the biggest figures in the sport. But he's also controversial. What do you think of the job he's done and where can he get better? Has he ever said anything that just makes you groan and go, 'Oh, Dana,' when you hear about it?
LF: Bottom line, and I've said this before, but I don't think anybody could have accomplished what Dana has. It took somebody like Dana who's got street smarts, who doesn't pull punches, who speaks his mind, who never bull(expletive), to do this. At the end of the day, if we had taken a Harvard MBA and hired him in 2001 to run this company, we'd probably be bankrupt right now. There are so many things that are unconventional about this business. This isn't something you can read about and learn in a textbook. This is a business where, day-to-day, you have to be on the ground and you have to be on top of your game. Dana is that guy. I truly believe that Dana was put on the Earth to run the UFC.
Y!: Dana seems like one of those guys who, if you get on his bad side, you never get off. There was the whole thing with Matt Lindland, for instance. He's a fighter who by all rights should be in the UFC but is not. Do you talk to him about this and try to mediate any of these kinds of situations?
LF: We talk about different points, but Dana does what he wants to do. He's proven that he has great instincts and most of the decisions he's made have been for the best. Nobody is perfect, but I think Dana White has done a fabulous job building this company into far and away the industry leader and I'm not going to start telling him now how to do his job. He's proven he can do his job without me holding his hand.
Y!: Is the business better off at the dawn of 2008 than it was at the beginning of 2007?
LF: I believe it is, without question. Since we've had this, we've ended a year and could point to what I would consider a couple of significant accomplishments during the year that allowed us to move the business ahead and grow the brand. But I really believe that 2008 is going to be our best year. I think we're right in the perfect position
