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UFC’s branding & competition
By Zach Arnold | August 22, 2006
By Zach Arnold
Jeff Thaler has thoughts about a recent newspaper article in which UFC’s COO talks about the amount of money that the UFC fighters are paid per-fight. The Miami Herald has more on UFC’s media momentum and branding.
I have seen many sentiments online about UFC facing competition in the near future. So far, the track record of groups running against UFC has been rather unimpressive. The IFL has an interesting concept, but so far the execution has been lacking. The WFA, which has been the group most willing to spend money, lost a lot of $$$ after one show.
To me, the first real test for UFC will be Calvin Ayre, CEO of BoDog.net. Ayre has millions of dollars (literally spare change for him) to spend on MMA. Based on what I have heard so far, Ayre is assembling experienced MMA management into his new company. Ayre’s sheer wealth and potential resources is what makes him a dangerous threat to UFC. It’s what Ayre has and the others don’t have that makes the difference.
Ayre seems determined to get involved in MMA in a big way (including signing a deal with Red Devil). He may be the one person who can provide true competition to UFC.
Topics: All Topics, Media, MMA, UFC, Zach Arnold | 9 Comments » | Permalink | Trackback |
This is all great in principle but at the end of the day the most notable thing to come out of having more organisations, is the dilution of the talent pool and the promoting of piss poor events because they are the best available to the org in question.
Let’s hope that it means higher fighter purses and in turn more high quality fighters, otherwise we’re going to be in for some shitty undercards!
It will be interesting to see what Ayre does. There is a limited talent pool out there. Just how much is he willing to spend, and lose? He worth is estimated at 1 billion dollars so clearly a couple million is not going to upset him, but just how much of his own worth is he willing to spend?
One thing that the UFC can offer it’s headliners is the ppv bonus. Because they are the only company that is really doing well with ppvs, it would mean that Ayre would have to offer pontential paydays of 1 million and more to fighters. If he choses to do that, his payroll will be in the tens of millions. Add the production costs and he could be looking at shows losing him 8 figures. The television his company has used has been paid programing. Even the WFA’s Showtime program was paid programing. That will run the price up even more. Even for the richest of folks, that would have an impact fairly quickly.
His entering the market will have an impact on not only the UFC, but Pride as well. Certainly he would be taking talent from them as well. Strikeforce, the IFL and WFA will almost certainly be in a world of hurt.
He can make an impact, but is he willing to lose enough to make it? As I said, he net worth is an estimated 1 billion dollars, but a portion of that is his company. If he loses 20 million, will he still be gun ho?
Ayre may also have a regulatory problem in the US. Whatever you may think of it, and while the laws vary in different countries, Internet gambling is still considered illegal by the US government. That position has been upheld in court.
I thus do not see how a company financed by him can get a promoter’s license in the US.
Plus, the online gambling operations compete with the American casinos, so they would probably oppose him, too. And we know all about the lovey-dovey relationship of many athletic commissions with these gamblong halls.
He could run ppv’s from Costa Rica or wherever, but it would not be the same if he doesn’t have live shows in the states.
Eddie,
Thanks for bringing that up. I was under the impression that might be an issue, but because I do not know enough about him and did not walk to talk out of my ass.
Remember that Ayre is a Canadian. His business would still have some difficulty advertising in the US; however, he himself would be _less_ vulnerable to US regulatory entanglements as a noncitizen.
The issue is not that Ayre personally can he held liable for breaking US law, although Bodog already evaded one lawsuit this way:
http://www.marketwire.com/mw/release_html_b1?release_id=152511
But his company still reportedly takes bets from Americans and thus he as head could be arrested if he set foot on American soil:
http://www.theglobeandmail.com/servlet/story/LAC.20060726.RGAMBLING26/TPStory/Business
The issue I raised, however, was whether a mixed martial arts promotion financed with money from Ayre and/or Bodog could be sanctioned in the US.
Do you think Zuffa’s lawyers are unaware of this problem? They sued IFL over bullshit, but now might have a legal adversary whose head can’t even visit America without risking immediate arrest.
Ayre could easily finance a promotion without a promoters license. He just needs to have the license be in someone else’s name (if indeed the internet gambling connection would preclude him from getting licensed himself).
and he could start another LLC that is in no way connected to bodog.com.
I don’t think that there is a problem there, although that doesn’t always stop litigation.
The UFC did what any business would do under the ricumstances when it came to the IFL. But look at it anyway, they have a half cockjed idea and not enough promotion to really get off the ground. They aren’t seeing a 3rd of the fan base that the UFC has buit. Arye will run into the same thing. not to metion all the legal problems he faces just trying to get his foot in the door. He may have moeny but it will take millions and millions just to get up and running, and then millions and millions more to keep it up. It he doesn’t get an immediate fan base to pay the bills he will be sunk! What’s the problem with have one major promotin just like the NFL, NBA, and now the UFC!