UFC looms closer to the mainstream
Dana White would all but have a stroke if one suggests the Ultimate Fighting Championship has finally hit the mainstream.
Two of its Past three pay-per-view cards surpassed one million in sales.
The replay of UFC 91 on Spike TV on Saturday set a record for the largest audience ever for a non-live show on the network when more than 3.3 million people tuned in.
This came despite competition from a hot boxing match between Antonio Margarito and Shane Mosley on HBO – which attracted more than 1.8 million viewers – and a live Affliction mixed martial arts pay-per-view and the pay-per-view repeat of UFC 93.
White fully expects UFC 94 on Saturday at the MGM Grand Garden Arena in Las Vegas to become the best-selling pay-per-view in company history, with more than 1.3 million sales. The company's record is 1.05 million, set in 2006 at UFC 66, which was headlined by the second bout between Chuck Lidell and Tito Ortiz.
The UFC generated more than $300 million in pay-per-view revenue in 2008, surpassing boxing and the WWE for the second consecutive year.
One of his competitors, the Irvine, Calif.-based promoter Roy Englebrecht, calls the job that White and partners Lorenzo and Frank Fertitta a model for a start-up company that should be taught in business school.
The foundering company they bought for $2 million in 2001 is now worth in excess of $1 billion, Forbes magazine estimates.
Yet White, who takes nearly every opportunity to boast about his success and to revel in his competitors' failures, won't even consider the thought of the UFC being mainstream at this stage.
"We have so much more to do, and so far to go, that we're not even scratching the surface right now," White said. "Let Shaq [O'Neal] or Kobe Bryant walk down the street and every single person out there on Las Vegas Boulevard will know who they are. Our guys, a lot of them can still walk through the casino and not really be bothered or recognized too much. We'll know we've hit the mainstream when our fighters are recognized in public the way Kobe, or Shaq, or LeBron [James] are right now."
Mixed martial arts hasn't hit the mainstream in media coverage either. The UFC held a news conference in the Hollywood Theater at the MGM on Wednesday to promote UFC 94. It was the same venue where, about eight weeks earlier, Golden Boy Promotions and Top Rank held a news conference to promote the boxing match between Oscar De La Hoya and Manny Pacquiao.
The De La Hoya-Pacquiao news conference was overflowing with Internet writers, with newspaper reporters and columnists, television reporters and radio newsmen representing nearly every major market in the country.
The theater was largely vacant for the UFC news conference. There was so much room that UFC publicists allowed fans who are members of its UFC Fight Club to enter and watch.
Yet, the UFC card is expected to surpass the 1.25 million pay-per-views that the De La Hoya-Pacquiao fight sold, perhaps by a significant amount.
It's more evidence that White and the Fertittas have become the country's preeminent promoters, regardless of the sport. Once MMA gets the kind of intense media coverage that major boxing matches enjoy, its pay-per-view numbers will likely rocket upward.
But Lorenzo Fertitta, who resigned as president of the Las Vegas-based Station Casinos in June in order to take a more hands-on approach with the UFC, didn't enter the business to be a traditional promoter. From the moment he signed the closing papers, Fertitta's vision was always grand.
It's starting to play out now. The company announced Tuesday that it would open a series of UFC-branded gyms later this year. It announced a deal to produce action figures of its fighters last year. A video game that, from a demonstration given prior to UFC 93 in Dublin, Ireland, appears to be extraordinary, will be released soon.
The UFC is on television in some form in more than 190 countries.
"It's a cumulative effect of all the things we're doing," Lorenzo Fertitta said of the UFC's recent successes at the gate and on pay-per-view.
UFC 94 was sold out two weeks early and will produce a live gate of more than $4 million, the sixth time since the Fertittas have owned the company one show has exceeded that number.
To put that into perspective, the Affliction MMA card and the Margarito-Mosley match, which drew more than 33,000 fans combined on Saturday, combined for a gate of just under $3 million.
Fans who attend UFC 94 on Saturday will pay an average of better than $285 per ticket. Richard Sturm, the president of entertainment and sports for MGM Mirage, the company that owns the MGM Grand, said the UFC has been a boon to the casino business in Las Vegas.
He said it draws a young and affluent crowd that pays top dollar for its tickets and spends in the casino.
"These are extremely good customers for us to have," Sturm said.
Several boxing promoters have alleged that the UFC frequently pays the state tax on its tickets and then gives them away. Because the state tax is paid, the Nevada Athletic Commission considers it a sold ticket and it appears on the box office report that way.
Sturm, though, said that's erroneous, and said UFC fans are paying for their tickets themselves and have since the first show there, in 2001.
"The UFC has been very good for us and we feel fortunate to be their home here in Las Vegas," Sturm said. "They were always able to sell tickets, but it took a while to get warmed up. Our [casino] customers at first weren't all that familiar with it and it started off slowly that way.
"But it's a terrific business for us right now and we're able to attract the kinds of customers we like. Every year now, we know going in we're going to have a handful of really solid weekends because we know we'll have a UFC event on site."
The company's success has trickled down to the fighters, who are becoming celebrities as a result of their affiliation with the UFC. St. Pierre, who last year signed a deal with Creative Arts Agency, a high-end entertainment and sports representative agency, said his business opportunities have increased substantially in the last three years as a result of his exposure in the UFC.
"I have [financial] security for my future now," St. Pierre said. "I just paid my parents' house, their mortgage. I went to the bank and I paid everything. It was a dream for me to do that, but at the beginning of my career, it was something I could not afford.
"It was always a dream for me to be in this position, but it was just a dream. The growth of the sport has been tremendous. Year after year, it surprises me how popular this sport has become. I was expecting it, but it has happened so fast. I was not expecting it to happen this fast."
The UFC's success has opened doors for others to enter the business. And while Affliction has lost millions of dollars on each of its pay-per-views, the fact that more than 13,000 fans showed up in the Honda Center in Anaheim, Calif., last Saturday is proof that while MMA is still a UFC-dominated business, fan interest in the sport is rapidly increasing.
Even if, as White insists, Affliction's tickets were given away, the tickets were at least used and weren't dropped into a waste container. One high-level source said that Affliction's pay-per-view did about 10 percent less than its inaugural show in July. The source said the first show finished with between 90,000 and 100,000 sales, while the second show did between 80,000 and 90,000.
Tom Atencio, the vice president of Affliction Entertainment, said he didn't have final numbers and isn't likely to make them public when he gets them. He insisted the first Affliction show did well more than 100,000 and said last week's show did better.
Richard Schaefer, the CEO of Golden Boy Promotions and Affliction's partner, said he understood that the pay-per-view would come in between 175,000 and 200,000.
Englebrecht, who co-promoted the show in Anaheim, said he believes MMA is nearing mainstream acceptance.
He heaped praise upon the UFC for the work it has done in building the sport, and pointed toward the fact that ESPN's Spanish language network, ESPN Deportes, will carry an MMA series in 2009 as evidence of the sport's fast climb.
"That wouldn't have been possible five years ago," Englebrecht said. "I think it speaks volumes right now about where MMA is in regard to the mainstream that an ESPN network would step forward and commit to 12 shows."
The easy-going Atencio, who would not guarantee that Affliction would promote a third show after sustaining huge losses on the first two, agreed with White that MMA has yet to hit mainstream. But he pointed to the fact that Affliction headliner Fedor Emelianenko rang the opening bell last week at NASDAQ stock market as proof it's not far away.
But despite Emelianenko's popularity among the sport's hardcore fans, the preview show featuring him that was broadcast on Fox Sports Net did not draw enough viewers to register in the Nielsen Ratings.
Upon hearing that, White boasted that the video blogs he posts on YouTube before each UFC pay-per-view draw more viewers than Affliction's preview show.
But Atencio said the signs are there of mainstream acceptance, though.
"We're getting there and the barriers that existed are slowly coming down," Atencio said. "In a lot of ways, I still feel like Sisyphus pushing that boulder up a hill, because there are still a lot of obstacles and hurdles, but the awareness of this sport among the general public is significantly greater than it was just a couple of years ago."
But promoters like EliteXC, which shuttered its doors in October, and Affliction have found it exceptionally hard to compete against unyielding UFC owners. White gave Affliction competition on nearly every angle. He ran a live pay-per-view from Dublin on Jan. 17, a week before the Affliction card, that he said "surpassed our projections by a mile" for its pay-per-view sales.
On the night of the Affliction card, the UFC broadcast the Brock Lesnar-Randy Couture fight from UFC 91 for free on Spike directly opposite Affliction. It also made its re-broadcast of UFC 93 available for purchase on pay-per-view, and it occupied the main pay-per-view channel on DirecTV.
White then put a free WEC show on Versus a day after Affliction and has the huge St. Pierre-Penn on Saturday.
Englebrecht owns his own company and promotes many boxing shows and is doing lower-level MMA shows. He said he's not sure when, or if, another show can compete head-to-head with the UFC, but said the UFC has made it possible for promoters like him to successfully add MMA to the business.
"I'm sitting here as an MMA promoter and a boxing promoter because of the UFC and because of the time, money, energy, passion and sacrifice they've made," Englebrecht said. "There is an appetite for this product. We put on two shows with Affliction Entertainment and I still have people telling me that the cards themselves were two of the best fight cards they've ever seen.
"But the UFC has kind of rocked this world. Dana and the Fertittas put a business plan together that is the best I've ever seen. What Dana White has done with the UFC should be taught at Harvard Business School."
Part of the secret of the UFC's success has been that it has relentlessly built and promoted the brand name so that it is not dependent upon one fighter. Much of boxing's pay-per-view success of the last decade was attributable primarily to De La Hoya. While there are MMA fighters who sell better than others, the UFC's work in promoting the brand has had a powerful impact.
"The brand recognition they have is extraordinary," Sturm said.
Fertitta said he believes the UFC is now experiencing what its "second wave" of success. The company lost more than $40 million upon gaining control in 2001 until the Stephan Bonnar-Forrest Griffin fight on Spike TV in 2005.
That fight was so good, it helped the UFC land a long-term deal with Spike and accounted for the first positive signs for the UFC.
Now, staring at the likelihood of selling in excess of 1 million pay-per-views on Saturday for the third of four shows, Lorenzo Fertitta is seeing the beginning of the second surge.
"We've connected the dots and in promoting our fights, we've created these ancillary businesses, which … will be used to help promote our upcoming pay-per-views," Fertitta said. "There are a lot of synergies there."
White, though, said he couldn't wait until 10 years from now until he can look at the skeptics and say, "I told you so." He's long predicted that MMA will become the world's most popular sport, surpassing even soccer.
While that might be a stretch, White said the possibilities are endless.
"We're taking this around the world and what we find is that once we do a live event in an area, people just get hooked and become long-time fans," White said. "Everybody gets a fight. And so we're going to Germany, France, Italy, all these places. We're going to create and develop fans everywhere. Believe me when I tell you, this thing has only just scratched the surface.
"We've only just begun."
