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“(UFC) is the only sports property that is pure and works literally around the entire world.”

By Zach Arnold | August 22, 2011

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Listen to the boss of FX talk to the Yahoo Sports Cagewriter.com crew about changes coming for The Ultimate Fighter and UFC programming on Fox platforms

A couple of interesting developments have surfaced in regards to UFC’s new 7-year deal with Fox. Before we get to those developments, I thought some of the comments Lorenzo Fertitta made last Thursday should be highlighted here.

“Well, we always really felt like we wanted to be on network and those other deals just didn’t make sense for us, not just financially but in a lot of different ways. The reason this deal works is because of what you saw here (on Thursday). It’s not just, hey, we’re going to throw a fight up on Fox and see if it works. This is a 7 year commitment at every level – broadcast, cable on a channel that is my favorite channel, it’s in over 100 million homes, definitely at the front edge of new, original programming. Now FX is not only going to have the UFC but they got PAC 12 football, Big 12 football, so now they’re jumping into the sports area in a big way and then also having shoulder programming on Fuel and then count all the RSNs (regional sport networks). So, it’s not just about this is a broadcast deal, this is a major media deal at every level throughout the spectrum.”

“I mean, when you have the biggest sportscaster, biggest sports media company in America coming to the UFC saying we’re not going to just put you on, we’re going to embrace you as part of our family, we’re going to treat you exactly we treat the NFL, college sports, MLB, I mean, yeah, this is a big deal.”

As for how the deal got consummated, Middle Easy has been discussing and pontificating on the role of Ari Emanuel as the ‘fixer’ between the two sides. Ari Emanuel, the brother of President Obama’s former chief-of-staff Rahm Emanuel (the current mayor of Chicago). It should come as no surprise given that Blago talked about Rahm’s brother wanting MMA legislation in Illinois and that UFC happens to be one of his clients. Who can blame Zuffa?

The next domino to fall — Spike TV. Who will they get behind and promote? Will they end up working with Zuffa again to promote Strikeforce? It would be an easy way for Zuffa to block potential competition from getting some good cable real estate. Here’s Lorenzo describing UFC’s current relationship with Spike.

“You know, it’s been a real cordial situation. Let me tell you what, what a run it had been over the last 7 years for the UFC and for Spike. I mean, this relationship really benefited both of us. The reality is, though, that come December 31st at 12 o’clock, there’s no more UFC original programming on Spike. So, at some point we had to figure out where our home’s going to be because you can’t just turn it on a dime. We wanted to hit the ground running in 2012 with a lot of momentum and a whole game plan going forward. Of course, we were going to have to come out and tell people where we were going to be.

“Really, what it came down to, it wasn’t a money issue, it was a number of fights issue. We have to grow our business, we need more fights. We need more programming. We’ve got more weight classes and more fighters We’ve got fights we need to do from an international standpoint. So, when you have one channel that you’re broadcast on, one channel can only take so much programming, right? Now, with what I explained here, Fox broadcast, FX, Fuel, all the RSNs, so it opens up a number of pipes for us to be able to provide original programming and live fights. That’s really what the issue was.

“Look… competition’s great. We love to compete, we wake up every morning, that’s all we think about. It’s good. I hope these guys step up and come up with a creative idea and challenge us. I think it’d be good.”

Yes, competition is great… for them to buy out and savage like a carnivore, so I give Lorenzo credit for stating the obvious that they do think about crushing others in their ’space.’

The obvious answer for a replacement on Spike would be Bellator. However, Dave Meltzer says that Viacom is not interested in seeing Bellator move from MTV2 to Spike. What, are they concerned about the Feds looking into the hedge fund money backing Bellator? Bjorn Rebney seems to be hedging his bets and basically saying he is powerless at this point in regards to what Viacom wants done on Spike. Then again, what other alternative options are there for Spike for replacement MMA programming? Bellator is far ahead of Pro Elite in terms of structure and experience in putting together a roster to run cards and produce events. Shark Fights?

The biggest question mark about this new deal with Fox is whether or not the increased exposure will help grow UFC and, if so, by how much.

“Fox just got a sports property that is going to be the biggest sport on the planet, right? It literally is going to be the biggest franchise on the planet and we tell the story all the time. The NFL doesn’t work outside of the United States. FIFA has all the problems with the corruption and everything that is coming of. There’s corruption in cricket and cricket doesn’t work in other countries. This is the only sports property that is pure and works literally around the entire world and I’ve tried to explain because I think there’s still some people out there here in the U.S. on the reporting side that just don’t get the magnitude of what’s going on here. I mean, obviously this is big for the male demographic 18-to-35, people in the know, that generation. But a lot of people don’t know that we’re going to go down to Brazil and literally take over that country. There are signs in the airport in Brazil that say, 2011 UFC, 2014 World Cup, 2016 Olympics. They’re putting us in the same frame work as the World Cup and Olympics and you know how big that’s going to be in Brazil. We’re taking over the country, the city of Rio is sponsoring the event, and we’re expecting 30-40 million people, maybe more, being conservative, [that are] going to watch Anderson Silva defend his title against Yushin Okami. I don’t think people get that here in the U.S. because we haven’t been on that broadcast platform here in the U.S. to really show what we can do.”

UFC growing and the sport of MMA becoming more stable is a benefit to the fans, to writers, and to the fighters who depend on making a living. At the same time, however, it is fair for someone to be skeptical about whether or not we are going to see a real growth explosion under this new business marriage. Yes, UFC going from Spike to Fox is like an ice cream store going from a strip mall to Mall of America, but they are still an ice cream store that sells & markets one flavor of product.

I’m of the belief that UFC running too many shows risks overheating the company’s business machine and stretching their production crews out too thin. They will be able to run in most world markets (outside of a few like Japan) and do so very profitably. The question is whether or not UFC can treat their business like most retail stores (the Best Buys of the world) treat their bottom line by encouraging investment simply due to sheer volume of activity at the risk of having to contract later on down the road when things get too bumpy.

As for whether or not the broadsheet media in the U.S. will embrace UFC on a different level thank to their new deal on Fox, my guess is that there will only be a limited impact because most of the stick-and-ball sports writers & editors will look at UFC as a niche sport permanently. That’s something that UFC simply can’t control.

The best quote on the current media landscape covering MMA:

“Zuffa has created a culture where the media is actually their promotional partners. Zuffa believes media only there to promote their product.”

An addition domino to fall — Zuffa has hired a New York City-based legal firm to help them out with the current FTC investigation against the company.

Topics: MMA, Media, UFC, Zach Arnold | 12 Comments » | Permalink | Trackback |

12 Responses to ““(UFC) is the only sports property that is pure and works literally around the entire world.””

  1. Chromium says:

    About the anti-trust thing: I don’t think they qualify for anti-trust proceedings. No other MMA company was doing major PPVs here, so that’s out. Strikeforce meant they had a _near_ monopoly on top talent but that’s still a subjective measure, nor do they have an outright monopoly right now.

    Anyway, it’s definitely in the UFC’s favor to let Bellator live right now, since if they died then you really could make a solid legal argument that the UFC has an American television monopoly.

    I wouldn’t read to deeply into the anti-trust stuff yet though.

    I’m of the belief that UFC running too many shows risks overheating the company’s business machine and stretching their production crews out too thin. They will be able to run in most world markets (outside of a few like Japan) and do so very profitably.

    Okay, about this. I really do not think Japan is impenetrable. I forsee them making annual visits there just like they may end up making to Scandinavia or wherever, and be successful there on those individual shows. I certainly see them having an easier time in the Japanese market now than they do in Germany. I wouldn’t begin to claim that they’d draw the sort of crowds Pride did, but I think they’ll do just fine at the Super Saitama Arena, and maybe get on TBS too, whom they have a limited contract with to do condensed shows that happen to have a lot of Japanese fighters on them.

    Is that “success”? Well, if your definition of success is that they’ll be able to run almost anywhere, but nowhere outside of North America will be getting more than two shows a year anyway anytime soon, so if they can do that in Japan and draw a decent crowd I would consider it “successful.”

    • Steve4192 says:

      I’m no anti-trust expert, but yeah, I really don’t see how they could be considered a monopoly when the vast majority of domestic MMA promoters have all popped up in the post-TUF era. Yes, many of them have gone out of business, but that is just a reality of start-up businesses. Most of them fail. But for every well-known failure (IFL, EliteXC, Affliction, Bodog, etc.), there are also a bunch of less well-known success stories (Titan Fighting Championships, Shark Fights, Tachi Palace Fights, MMA Big Show, Ring of Combat, Ring of Fire etc.).

      It seems to me that the MMA industry as a whole is thriving. There have never been more successful MMA companies than there are right now. A few high profile failures does not change that.

      • nottheface says:

        I’ve talked to a couple of people I know who are much more knowledgeable about such matters than I am for an aborted fanpost at BE and according to them any charges brought against them by the FTC are more likely to be because of their monopsonistic control of the labor market and less to do with any monopoly with regard to buyer choices. If they bought Pride and Strikeforce because the were for sale is one thing, but if they overpaid what the market value of those companies were so as to keep them away from other potential buyers who’d competing for talent – or even to keep them from potentially competing for talent – well, that’s could be an anti-trust violation. In fact, if one looks at a wide range of their actions, the banning of companies who sponsor outside fighters, their perpetually renewing contracts, the whisper campaigns against certain fighters, etc. combined with their profits which are beyond “in the margins” all that could be looked at as a history of successfully having a monopsony over the sport.

        Still, I’m betting two things: that nothing really comes of it (or at most a slap on the wrist) and that no matter what the majority of fans are going to side with the UFC in the matter.

  2. Jason Harris says:

    “Zuffa has created a culture where the media is actually their promotional partners. Zuffa believes media only there to promote their product.”

    Isn’t that how it works in pretty much everything? The media is there to make money by talking about something people are interested in, and those people make themselves available to the media because they benefit from the attention. Are actors going on the Tonight Show just for fun? Athletes doing interviews in the locker room after the game is just there to make sure the game stays on the nightly news cast.

    The whole “niche sport” thing has always bothered me too, because it seems like people have two categories:
    The Superbowl
    Niche Sport

    I mean, is NASCAR a niche? Is golf? Tennis? NHL? College football? Soccer? How big do you have to get before you’re considered mainstream? Most people couldn’t name 5 boxers currently fighting. Is boxing mainstream? Or is it a niche? UFC is getting a hell of a lot more eyeballs overall than boxing, but boxing is “mainstream” and UFC is “niche” in the eyes of most internet commenters.

    Most of the people who gripe about UFC are the same trolls who write inflammatory articles bashing the UFC/fighters just to draw in the 400 comment flame war thread that will come in the replies. Basically a large chunk of the MMA media takes a tabloid approach towards it, then acts like they are these poor persecuted victims when it hurts their access. Do you think Deadspin.com is getting access to major sports events? Hell no. The problem is that with MMA being less established in the mainstream sports media, some of the biggest outlets are just that. They have large fanbases, but so does Perez Hilton and TMZ. That doesn’t make them credible and I can’t see why anyone is shocked that they don’t get access as a result. It’s not about kissing UFC’s ass, because MMA Fighting will criticize UFC all the time. It’s just a line of professionalism that most websites happily cross all the time in the name of the almighty pagehits.

  3. 45 Huddle says:

    SpikeTV is in a weird position when it comes to replacing the UFC.

    Using Bellator, if you really think about it, makes no sense. They don’t have the promotional power to grow and likely never will. Financially they are on shakey legs. And there is always the chance that their money backers want out and will just sell the company. And one of those buyers could always be Zuffa.

    So it really only makes sense for SpikeTV to either go with Strikeforce or nothing at all.

    If you look at it from Viacom’s perspective, SpikeTV has been one big failed experiment on getting the yonger male demographic long term. When they went from The Nachville Network to The National Network, they brought on ECW around that time. That was never a ratings success. Then they got the WWE, but they left after their first contract was up. TNA has been a bust. The UFC was successful but SpikeTV could not keep up with them and the UFC outgrew them.

    So over the course of about 10+ years, SpikeTV has had ECW, WWE, TNA, & the UFC. 3 of them are gone, and TNA isn’t very good. It’s time for them to go a different route…. It’s blatantly obvious. So it’s no shock that the Viacom people don’t want Bellator….

    • Robert Poole says:

      ECW wasn’t a ratings success because of TNN (new to the game, using ECW as a test case to try to lure RAW and too involved in ECW’s creative process). They crippled the promotion both financially and content-wise. WWE was a huge hit on Spike and WWE only bolted due to a ridiculously sweeter deal from NBC/Universal.

      And as much as you want to give UFC credit for their partnership thriving, lest we forget that Spike helped market UFC in a way that helped them take off. Had it not been for them pushing TUF right after RAW or promoting UFC like their crown jewel, UFC wouldn’t be where they are today either.

      Out of everything you mentioned, TNA is the only really non-success and that’s because they have morons running their company.

      • 45 Huddle says:

        And yet it’s only the non successful promotion that they have left….

      • Chuck says:

        Even though ECW’s ratings were low, they were still amongst the highest on TNN (then known as the Nashville Network).

        And even though TNA’s growth has been minimal at best (fun fact; TNA Impact has been on the air longer than WCW Nitro was. Of course I’m counting their one year on Fox Sports) Impact’s ratings are amongst the highest on Spike TV.

        God bless the rich, clueless money mark for using TNA as a tax shelter to keep it alive (Dixie Carter).

    • Chromium says:

      If you look at it from Viacom’s perspective, SpikeTV has been one big failed experiment on getting the yonger male demographic long term.

      Wait, what? To the best of my knowledge Spike TV is profitable and does skew young and male. If they’re making a profit they are not a failure. The WB and UPN were failures as neither one of them made a profit during their entire runs.

      Anyway, Bellator just needs to deliver something like an 0.7 rating for Spike TV to be happy, which is much more feasible on Fox than the much less viewed MTV 2. If Spike pays them enough to stay alive, they’ll survive, and possibly grow. Spike certainly can get behind them from a marketing perspective.

      If Bellator doesn’t deliver the ratings Spike TV can always cancel them. And in the end it’s not a huge risk for Spike. That they can use older UFC programming as a lead-in through the year 2012 only helps.

      If Spike has an opportunity to pick up Strikeforce at a reasonable price, then yes I think that they would pick that over Bellator. I doubt any such deal has been offered though and if you are getting this idea from posts on the UG by MMALOGIC you’ve been trolled.

      At any rate contrary to popular belief Showtime would not be making any decisions about Strikeforce’s future yet. I kind of expect them to hold onto the promotion, even if it’s being stripped of its champions. The UFC does not have room right now (no seriously they are doing fewer fights next year than this year) for more than a few top guys, while there are still like over 40 UFC-level fighters in Strikeforce (by which I mean good enough to fight in the UFC, not good enough to be a star in the UFC). Anyway we’ll see what happens.

  4. Manapua says:

    Zach,

    Can you write something about this tortious interference investigation the FTC is looking into with the UFC?

    • Chromium says:

      I can’t remember a single rumor of the UFC engaging in tortious interference actually. I think they’ve been extremely careful about that. Why would they even need to?

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