By Zach Arnold | November 15, 2016
The UFC feared the movement to amend the Ali Act for MMA so much that they were willing to risk significant political capital in order to win the battle even if it meant losing the labor wars in the long term.
Proponents for amending the Ali Act to cover MMA now have two months in the Congressional lame duck session to get something passed before the door is permanently slammed shut. Once that legislative door is slammed shut, there will only be two paths left for labor to fight UFC:
- Wait and see how the MMAFA anti-trust lawsuit plays out in Las Vegas court with a potential settlement or
- Organize quickly under the PFA banner with Jeff Borris and Lucas Middlebrook
The latter option would likely result in a Collective Bargaining Agreement which would probably kill any future antitrust litigation.
You know which way the winds are blowing. So does the UFC, which makes their public gamble in backing Donald Trump all the more breathtaking in hindsight. They calculated a medium-risk, high-reward play. Get Trump in the White House and the return on investment would equal the power brokers in the fight industry enjoying the most political power ever. Trump has spent decades promoting and celebrating the likes of Don King, Vince McMahon, and UFC. It’s in his blood. And now he’s going to return favors in a big way, starting with UFC & WWE as big beneficiaries. Linda McMahon may even land in Donald Trump’s cabinet.
Whether you like or loathe UFC’s political power play here, UFC was going to be fighting on behalf of Trump one way or another. If Lorenzo Fertitta had retained ownership of UFC, he and casino owners like Sheldon Adelson & Steve Wynn would have found themselves in a nasty proxy war against Bob Arum and the Culinary Union in Nevada. It would have been a statewide bloodbath. Once Lorenzo Fertitta sold UFC to Ari Emanuel, then the next political strategy came into the equation: triangulation. WME-IMG & the Emanuel family are tight in the world of the Clintons. If Hillary Clinton had won the Presidency, she wouldn’t have changed the Ali Act to cover MMA. UFC made the gamble that Dana White backing Donald Trump at the Republican National Convention would cover their ass on both ends. They executed their triangulation strategy perfectly.
The two major flashpoints since WME-IMG bought UFC
Once the price tag was announced of $4 billion dollars for the purchase price of UFC, fighters suddenly started getting friskier and less respectful of ownership despite the fact that WME-IMG is way more powerful than Lorenzo Fertitta ever has been in the business world. What Lorenzo knew best was manipulating the emotions of fighters & managers. He made fighters feel like they were building equity in UFC that everyone would share in. A family atmosphere.
That all changed when there was an actual sticker price attached to UFC.
Fighters are either speaking out about wanting a piece of ownership or extra cash because “they know their value”. Fighters are considering retirement at an earlier age. More fighters are not making weight for fights because the repercussions aren’t serious enough. UFC will likely have to address this later on with liquidated damages clauses in new contracts. With heavy pressure to cut costs due to a high debt load, WME-IMG will be in Mitt Romney mode to try to shed as many financial obligations as possible in order to either setup an IPO situation or flip the company like a typical venture capitalist after obtaining a new television deal in a few years. With the landscape of sports television collapsing due to plummeting household numbers, it’s not going to be as easy to cash in as first thought. With ESPN losing 600,000 households a month and Fox Sports 1 losing 300,000 households a month, how much are the biggest corporations willing to spend on UFC? WME-IMG is hoping to end up with a Bain Capital result instead of a Cumulus dumpster fire bottom line.
And now the other shoe is about to drop because of UFC’s public support of Donald Trump.
The activist Left is pissed. They’re organizing new strategies through ANSWER, George Soros (Democracy Alliance), and other powerful Democrat Party entities. If history is any indicator, they’re going to raise hell for at least the next four years. The same campaigns that targeted advertisers associated with Rush Limbaugh, Glenn Beck, and Bill O’Reilly will now be pointing lasers at Dana White, Vince McMahon, & Peter Thiel. The last time McMahon was politically targeted, he infamously came up with the Right to Censor group.
UFC took the risk of backing Trump in order to destroy the bipartisan attempt of amending the Ali Act for MMA. What makes this move such a fascinating calculation is that it conflicts with a good portion of their audience. UFC’s online audience in the 18-to-34 demographic is as rabid as you will find with any sports property in the world. It’s also heavily liberal and the media writers that cover UFC are heavily liberal. It’s very similar to what the NBA online fan & media base looks like. The issue is that the offline UFC fan base, much like the offline NBA fan base, is a whole lot different politically than the online fans & media consuming the sport.
This is going to create some tension for UFC. The stakes got bigger after UFC ran their monster event at Madison Square Garden. There’s a whole new cast of political activists paying attention now. Black Lives Matter, backed by George Soros, is sabre-rattling their intentions on targeting UFC. You know that David Brock, integral hatchet man in the world of the Clintons, will be looking for his pound of flesh (despite the Emanuels being involved) and UFC will easily become one of his new targets. Things are about to get hairy for UFC.
I don’t know what the internal political & financial calculations were for UFC killing an Ali Act for MMA but they must have assumed that such a change to their business model would have seriously impacted their bottom line. Dana White was rather flippant in his latest response to the idea of fighters organizing. You can act that way when you have cashed out for a few hundred million dollars and have an exit strategy ready at your disposal. The UFC won this political battle but they may lose the labor war in the long term. The question is whether Dana White & WME-IMG will stick around to see those potential concessions before they pull the rip cord and leave the mess for someone else to deal with.