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How high can the UFC rise?

By Tomer Chen | February 11, 2007

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By Tomer Chen

It’s simply amazing: a product which, five years ago, was on the verge of collapse due to ever increasing expenses as well as not being able to run in a number of prime markets suddenly became in the last two years one of the biggest businesses to shift itself from ‘Dog’ status (under the BCG Growth Matrix) to something combining ‘Star’ and ‘Cash cow’ status on the matrix. Although the Zuffa-run UFC was not the force that opened the door for unified MMA rules and the beginning of acceptance in most states (insofar as regulation was concerned; you can read in detail the so-called Zuffa Myth story here), the selling of the UFC by Bob Meyrowitz’ Semaphore Entertainment Group (SEG) to Frank and Lorenzo Fertitta, the owners of Station Casinos (and Lorenzo was also a commissioner in the Nevada State Athletic Commission) began the pathway towards a new course for the UFC (and really MMA as a whole).

For the first four years of the Zuffa-run UFC, Dana White generally reported that Zuffa was going through an investment stage, being in the red as they were investing for the long term (the exact figures aren’t readily available as Zuffa is a privately owned company). Then, it seemed as though their investment was beginning to produce dividends for the company as the first season of ‘The Ultimate Fighter’ produced both a crop of pretty appealing fighters (such as Forrest Griffin, Diego Sanchez & Chris Leben) to a new audience of fans of the UFC and the Mixed Martial Arts product and a large main event fight at the PPV that followed the live season finale (UFC 52 – Randy Couture vs. Chuck Liddell II). Part of the success in attracting viewers to the TUF product should probably be credited to the fact that the WWE, which preceded TUF on Monday nights, most likely had carried over some casual fans who wanted to see the hyped reality show.

UFC 52 drew an estimated 280,000 buys and a live gate of $2,575,450, breaking the previous records set by the organization. And while there wasn’t any other significant drawing events in 2005 that showed the ever rising star that was to begin the following year, it was a good sign for Zuffa and Spike TV, especially given that the WWE was to leave in September of the year, forcing Spike TV to shift their focus from WWE as their flagship product to the UFC product, which showed viewership growth potential. A number of the more marketable TUF season 1 fighters also got initial exposure in the year, with the most notable moment being Forrest Griffin vs. Stephan Bonnar in the TUF 1 finale, which raised the stock of both fighters and the UFC product. 2006, however, would prove to be the year that UFC really hit its stride and moved on to the next level in the business industry, changing from a ‘Question Mark’ into the ‘Star’/’Cash Cow’ hybrid.

UFC 57, the rubber match between Randy Couture and Chuck Liddell (each won one of their previous encounters) occurred on Super Bowl Saturday. As discussed here, the suggested retail price for the PPV event was raised from $34.95 to $39.95, apparently to test the elasticity of the organization’s product demand and also to try and maximize the profitability of the PPV event given that it was perhaps the most heavily hyped UFC (with possible exception to UFC 40 with Ken Shamrock-Tito Ortiz I). The PPV broke the records set by UFC 52, earning $3,382,400 at the live gate and an estimated 400,000-410,000 buys, reaching nearly 150% of the previous record. While it wasn’t completely shocking that Couture vs. Liddell III would be successful, few if anyone really expected the massive growth in purchases and gate (from raised ticket prices).

Of course, UFC 58 would exceed expectations by most insiders, earnings 275,000, shocking given the main event (Rich Franklin vs. David Loiseau) and showing that a new plateau of fans had been reached. And UFC 59 would really get the ball rolling, getting 425,000 buys for the hyped Forrest Griffin vs. Tito Ortiz bout (as well as Tim Sylvia-Andrei Arlovski II). This trend continued throughout 2006, with UFC 60 drawing an estimated 615,000-625,000 buys for Matt Hughes vs. Royce Gracie in a catchweight non-title bout, 775,000 buys for UFC 61 (which had Tito Ortiz-Ken Shamrock II as the hyped fight as they were opposing coaches on TUF season 3 and Tim Sylvia/Andrei Arlovski III as the supporting bout), another shocking buyrate at UFC 63 for Matt Hughes vs. BJ Penn II (700,000 estimated) and finally, but definitely not least, UFC 66 with the Chuck Liddell-Tito Ortiz II fight have insiders estimating the total buys at around 1,000,000, a figure absolutely shocking, given that Oscar De La Hoya only cracked the million buyrate point twice (Felix Trinidad & Bernard Hopkins), though the upcoming Floyd Mayweather Jr. bout is anticipated to be his third. In addition, if the million+ expectation for UFC 66 is true, that will mean it is the biggest drawing PPV of the year, going over Oscar De La Hoya vs. Ricardo Mayorga (which had 925,000 buys). Truly, this is a huge shake up in the structure of the combat sports and PPV industries.

Naturally, coming off this initial analysis of the huge upward movement of the UFC PPV buyrates as well as its increasing gate plateaus, one would think that in another few years, there may be a very good chance that the UFC will beat the current outstanding PPV record (Mike Tyson vs. Evander Holyfield II with 1,990,000 buys). However, there are several factors to consider before putting the proverbial cart in front of the horse that should be considered, amongst others: (i) the marquee matchups such as Randy Couture-Chuck Liddell, Tito Ortiz-Chuck Liddell and Tito Ortiz-Ken Shamrock that are available in the next few months and years to create in order to constantly raise the bar, (ii) the significant amount of UFC events (PPVs & live TV fight cards) that will require a deep pool of fighters, (iii) market expansion opportunities as well as the elasticity of demand for the product (when considering PPV and ticket prices) and (iv) the UFC brand name (how effective can an ‘average’ card draw).

Regarding the first point, there are several questions to be asked: (i) What is the ‘ideal’ fan favorite type of fighter?, (ii) How long does the UFC have to promote such a matchup and with what tools? and (iii) How long can the fighter be a marquee draw who either draws at the same levels or even increases in value over time? Regarding the first point, the UFC tends to cater to a crowd who enjoys an active fighting style (rather than clinching against the octagon or laying and praying constantly after getting a takedown). An explosive puncher like Chuck Liddell is more marketable to the average fan than a Jake O’Brien who, while he may be a solid wrestler is generally content in getting the decisions through controlling his opponent on the ground and not trying to actively finish the fight. Although many fans tend to dismiss the UFC audience (using the live crowd reactions as an informal surveying tool) as only enjoying stand up battles, there are cases of exciting ground fights that they rather enjoyed (such as Karo Parisyan vs. Diego Sanchez). Of course, on the whole, it is possible that the average UFC fan wants to see a (T)KO standing up more than a ground and pound exhibition or a submission clinic. But even if a fighter does not fight completely in a manner which would be considered crowd pleasing, he may still get a fanbase through his ‘gift of gab’. Probably one of the best examples of a fighter who has become a significant drawing force based off of his talking abilities more than the amount of exciting battles he’s had would be Tito Ortiz. After all, he was involved in the two (current) biggest drawing UFC PPVs (UFC 61 vs. Ken Shamrock II and UFC 66 vs. Chuck Liddell) as well as the biggest pre-2005 buyrate (UFC 40 vs. Ken Shamrock). His smarmy, ‘I don’t give a fuck what you think’ attitude tends to heavily polarize the crowd, who more often than not boos against him, but at the same time attracts the fans like Muhammad Ali did for a good part of his career. The fans are enticed by the Pro Wrestling style of promo cutting because it creates color for a matchup that may otherwise be bland, or make a heated rivalry that much more heated (such as Ali calling Joe Frazier an ‘Uncle Tom’ before their ‘Fight of the Century’ first bout in 1971) because of the personal feelings that seep into the pre-fight hype.

Regarding the second point, it is generally considered a good idea to build up a fight for 4-6 months (at least) before the fight. By giving time to develop the matchup, its significance in the total picture of the sport and the implications of one fighter or the other winning, the fans can eat up the fight’s importance and hopefully some casual fans who may not have previously been interested in ordering the event will be interested in purchasing it, thus raising the revenue from bigger buyrates or higher ratings (if the TV contract gives incentives for drawing higher ratings). In the case of Randy Couture-Chuck Liddell II and Ken Shamrock-Tito Ortiz II, for example, the UFC promoted the fights by building The Ultimate Fighter 1 & 3 seasons around these four men coaching their teams of fighters while setting up the tension of their own conflict. Although in the case of Couture-Liddell both parties seemed rather respectful, in the case of Shamrock-Ortiz II, there were numerous confrontations between the two fighters and vignettes cut about the pathetic nature of the other throughout the season, showing the little respect both parties had for the other. As such, a national audience was given a near four month hype period for why these two guys wanted to destroy each other, even though Shamrock was pretty horribly beaten up several years earlier at UFC 40. The intense hatred between these two men masked the fact that in terms of a quality matchup it was essentially a mismatch and a rather fast stoppage at UFC 61 (which received the second highest buys to date for the UFC with 775,000) led to a rubber match on free TV, giving the UFC its biggest rating (to date) with a 3.1 overall and a 4.3 for the Ortiz/Shamrock fight. As such, the quality of the storyline became the critical variable in drawing in the fans. If there are two men who have a mutual respect for one another, the fans naturally will be skeptical regarding the potential quality of the bout as they may be more laid back than two guys ready to go for the other’s jugular at any moment.

As for the third point, one can look at the drawing power exhibited by Chuck Liddell and Tito Ortiz, as well as the staying power of Boxing fighters such as Mike Tyson (until recent times) and Oscar De La Hoya. Tyson is probably the best example, being a dominant force in the late 1980’s Heavyweight Boxing scene and becoming the biggest name and drawing card of his period. Following the ‘Buster’ Douglas upset and his prison time, however, many weren’t sure what Tyson had in the gas tank. Nonetheless, two of the biggest drawing PPVs of all time featured him (vs. Evander Holyfield II with the all-time record of 1.99 million buys and 1.8 million vs. Lennox Lewis, though the Lewis fight had the highest revenue gross at $103 million) clearly at the tail end of his career. Why? The most likely reason is (i) the aura of invincibility that Tyson had in the late 80s was in the minds of many fans and (ii) both fights (as well as the first Holyfield fight which reportedly drew 1.59 million buys) were the best fights that could be arranged at the time in terms of the name value of the fighters and general fan interest. Tyson’s insane press conferences and the (bad) publicity that was brought by the result of the second Holyfield fight (DQ by ear biting) probably continued his ‘bad boy’ image that he had developed since he began (and really launched through his prison stint for rape). So, for nearly 10 years (as he was in prison for a few years), Tyson was a phenomenal draw, becoming the king of PPV through his fights with Lewis & Holyfield. Meanwhile, Oscar De La Hoya still is going strong as a drawing card in his mid 30s, drawing 925,000 buys against wild swinging brawler Ricardo Mayorga and will more than likely draw over 1,000,000 buys for his 5/5 fight against Floyd Mayweather Jr. As for Tito and Chuck, looking at their second fight’s expected buyrate (1,000,000+ buys) shows you that even if both are in their 30s (Tito in his early 30s while Chuck in his late 30s), Tito’s charisma and Chuck’s badass persona and brawling style still managed to endear themselves to the fans.

The next issue that comes up is the amount of events the UFC is currently planning to run. It is expected that they’ll be running around 11 PPV events and probably 6-8 live events this year (including 1-2 TUF finales). Given that the UFC cards contain 8 or 9 fights on them, this means the total amount of fighters needed for the year will be anywhere from 272 to 342 fighters involved on the shows this year (assuming that they only bring in a fighter only once, which isn’t true, of course). Although they will certainly have the ability to bring in random opponents from the outside in order to fill out the undercards while placing the more established fighters towards the top of their card, it still may pose a problem in the long term in that the top end matchups may start to become rematches and rubber matches once the first set of matchups is complete. In the Light Heavyweight division, for example, Chuck Liddell has recently had to rematch Renato Sobral and Tito Ortiz (although in the case of Ortiz it was due to the massive buyrate and gate that the fight offered) in order to provide competition for his crown. At this point, the only opponents of potential significant drawing value that Liddell could face would be Quinton ‘Rampage’ Jackson again. In addition, a number of the top candidates besides Rampage that could theoretically face Liddell (such as Michael Bisping & Rashad Evans) are rather incomplete as fighters and would likely be defeated pretty easily. As such, it is important for the UFC to continue to bring in seasoned fighters in the fold and not just guys who had a few fights in KOTC or a similar independent organization without any truly quality opponent.

Another point of contention with regards to the amount of fighters needed is the fact that fighters may end up getting injured or having to face mandatory suspensions by the various athletic commissions due to the type of loss that they faced (TKO, KO or submission). The UFC will need to continually bring new fighters into the fold and though some may be of a higher quality, there will likely be lots of undercard guys who are essentially ‘learning on the job’ and building themselves up slowly to perhaps eventually face Sylvia, Liddell, Silva, GSP or Sherk or just to become a good gatekeeper-type of fighter. It will be interesting to see in the next few months if any contracts that may expire in other big organizations like K-1 HERO*S and PRIDE will lead to bidding wars between the UFC and these organizations (or even groups like the IFL and BoDog fight) where the UFC may be forced to present significantly higher purses per fight than it is currently (and subsequently the minimum purse offered may go up from around $3,000 to something like $6,000).

Another facet is the UFC’s market expansion and profitability expansion goals. Dana White has been talking heavily in the last few months regarding the desire to head into Europe, Japan and Canada to expand the markets where the UFC will participate in, hoping to capture a global market share. On first glance, it seems like a solid idea given that (i) the UFC can truly claim that they are an international product by presenting themselves in international territories for the long haul and (ii) they may be over saturating the US fight market at the moment by holding so many cards in a relatively small region (Nevada, California, New Jersey & Connecticut) and they may be risking backlash in the long haul. However, the UFC is entering some new US markets (such as Ohio & Texas), so they may be able to spread out the overexposure risks by going to one state at most twice a year (possibly even once if they get more states to accept MMA through Marc Ratner’s lobbying). With the former Executive Director of the Nevada State Athletic Commission in the UFC, the opportunities for expanding the acceptance of the sport from a legal standpoint (reversing any official bans such as in New York and getting an official set of rules down) are important for the long term success (and continued drawing power) of the UFC. After all, the 1950s growth of Boxing on Television essentially created a serious backlash within a few years as 2 national televised weekly shows (and a brief third one) caused a serious problem when most of the events were being held in the New York City area, causing declining attendances both due to the fact that a fan could watch the fight from home and also because the market became oversaturated.

In addition to the desire of the UFC to expand their market into new states and even new countries, there is also the element of elasticity of demand for the UFC product. As it is, the product is currently selling at $39.95 and is going strong. Initially, there was skepticism as to how well the UFC would be able to overcome price increase and still draw in fans, but as it is, it seems that the consumer’s willingness to consume has not been reached (or it may be at the threshold but they have not explored higher price ranges yet). It would probably serve the UFC best to slowly test the above $40 waters with a super fight (such as Liddell-Rampage II if it happens at UFC 71 as expected), charging $44.95 to see if the fans would be willing to pay that much for ‘special’ fights and if so, slowly edge it in as the new plateau level. By doing so, the revenues for the organization will increase with a minimal loss of consumer base. Of course, as it is, there is roughly 11 PPV events expected to occur over the year, costing $439.45/year for a customer (if he or she pays individually rather than as part of a group). A price increase to $44.95 would likely not be the true threshold point for most fans given that the five dollar bump would net only $55 in costs tot total $494.45. Nonetheless, it is generally believed in the PPV industry that the maximum threshold point for fights is $49.95, so the UFC may be inclined to stop at that point if they do find success at the $44.95 and $49.95. It should also be noted that the UFC has shown very good success in selling tickets to their Ohio & Texas debut shows, even with ticket mark-ups in the last few years, so the bottom lines are likely going up nicely in the black.

Finally, the brand name value of the UFC is critical to the long term value of the organization. After all, guys like Tito Ortiz and Chuck Liddell will only be around for so many years before either they wisely hang up their gloves or the commissions will force them to retire for significantly declining quality (such as what happened to Evander Holyfield after losing to Larry Donald). Luckily for the UFC, however, the original image brought in by Rorion Gracie and Art Davie and later fostered by SEG of a ‘No Holds Barred’ brawl until someone was stopped still resonates in the minds of the fans and the media as being the ‘real’ MMA product and every time MMA is mentioned, you are bound to hear “You mean UFC?” or “You mean Ultimate Fighting?” in the conversation, a sign to the strength of the sport’s association with the organization in the United States. Of course, on the flip side the fact that the media still claims that the UFC and MMA in general has a minimal set of rules and is anything close to the 1993 product is not really a wide endorsement of the product (especially considering that there are groups in states such as Utah that hawk around the product from 1993 as proof of the need to ban it, which would be comparable to demanding Boxing be banned based off of the London Prize Ring rules (Bare knuckle) era and the brutal ness of combat at the time). Nonetheless, the UFC is in the enviable position of being a pioneer in the MMA market, establishing their brand name thirteen years ago (albeit from a rather extreme marketing campaign as well as rather limited rules that in some ways will probably halt MMA’s mainstream acceptance for years) and becoming the face of MMA in the US and a good deal of the world.

What should the UFC do to try and expand their brand name value both to potential fans and to the media? It would probably be wise to first say that while it is true that the original UFC rules were rather limited, that the product produced at the time was the brain child of Rorion Gracie, Art Davie and SEG, who were trying to create a gimmick competition rather than a legitimate sporting event. It would also be a good idea to promote the fact that the competition showed good sportsmanship and requires skills and talent rather than the claims often made by critics of the sport that it’s a bunch of bar brawlers with little to no skill going at. Perhaps more of Marc Laimon’s ‘on the mat’ segments would be a good way to promote the complexities of the ground game, and also have Muay Thai, Wrestling, etc. segments placed on the free TV and PPVs cards to try and teach the fans a bit more about the finer points of the sport. And, of course, utilizing the TUF program as well as the numerous other shows on Spike TV and possibly even HBO (if things go well) to build up both a current super fight as well as the new generation of fighters that will replace the old guard.

So, what’s my personal opinion on the UFC’s ability to continue moving up? I would say they have a very good chance of increasing their fanbase if they utilize the assets that they currently have (pioneer in the sport, Marc Ratner for PR/sanctioning and their growing TV outlet) to promote themselves. Unlike Boxing where HBO, Showtime and ESPN are typically competing with one another for the viewers, the UFC is one organization what is getting quite a bit of free advertising on Spike TV (where they are the flagship program at this point) as well as getting lots of TV spots on channels such as MSNBC and Fox (News) to promote their product (usually the right way, although some of the shows do produce negative images for their own benefit). While we won’t know how far the fans will accept increasing PPV and ticket prices (given that elasticity in the real world is trial and error), it seems that, at least for now, the ceiling on UFC’s success is not foreseeable and even when they reach their limits the UFC will be involved in MMA (as its ambassador in the US) for many, many years to come.

Topics: All Topics, Boxing, MMA, Tomer Chen, UFC | 8 Comments » | Permalink | Trackback |

8 Responses to “How high can the UFC rise?”

  1. The MMA Critic says:

    Great article.

    It’s really hard to gauge how much higher the UFC can go in the future. They are certainly riding a wave. Coverage by ESPN SportCenter would at least keep a good public interest in the sport for years to come. It is like free advertising for Zuffa. Combine that with HBO & Spike, and they are still in a position for a strong product for years to come. And, keep in mind that this is Spike’s big show. They need the UFC probably more than the UFC needs them right now.

    Another idea closely linked to your article is how the sport of MMA will do once the market crashes. And my prediction is that when it crashes, it will crash worse then the NASDAQ did in the late 1990’s. With MMA being on the following stations in 2007: HBO, Showtime, SpikeTV, HDNet, Versus, MyNetworkTV, & the old PAX. It is just MMA overload.

    When the market crashes, and it will, the UFC should be okay. They will have secured a large enough hardcore fan base that they can still do well with 100,000 to 300,000 per PPV, and once a year have a “big fight” that gets closer to 500,000+. However, the rest of these organizations could be in trouble. IFL, Showtime, Bodog, Pride…. The market can only take so many companies. The fact that the MMA market is booming, and all 4 of the companies mentioned above are realistically losing money, should be an indicator of how hard it is to be a promoter in this sport if your company name isn’t the Ultimate Fighting Championship.

  2. Tomer Chen says:

    Even though many people try to deny that the United States is the primary market for combat sports in general, the fact of the matter is that if you want to tap the biggest market, you have to get into the U.S. Even though Ricky Hatton was able to draw big crowds in Manchester under the management of Frank Warren, he readily admitted that in order for him to get the maximum amount of respect (in terms of quality of opposition) and money, he had to fight in the U.S., which he has done in his last two fights (vs. Luis Collazo who lost last night to Shane Mosley & vs. Juan Urango). He became ‘the man’ at 140 by beating the legendary Kostya Tszyu in Manchester, but the vast majority of big matchups (vs. Floyd Mayweather Jr., Miguel Cotto, etc.) were only going to be managable if he went across the waters and became an international fighting champion who would be marketed on a big U.S. Boxing channel such as HBO. With the majority of the powerful promoters in Boxing (King, Arum, De La Hoya, Duva and DiBella) being situated in the U.S. and all of them having stables of fighters under contract, Hatton knew he had to come over to get the big bucks.

    For the UFC this is a good thing as they have pretty much secured in the media’s mind that UFC *IS* MMA, and therefore 95%+ of the media attention on the sport will be on the organization, thus giving them the lions share of publicity. Even if the total MMA markets value was to contract (due to a recessionary period), UFC is pretty secured in getting enough attention to warrant solid buyrates (200,000-400,000 in my mind) for most PPVs with the occasional big drawing super fight. Just like there are certain fighters in Boxing that have drawn pretty well through thick or thin periods (Oscar De La Hoya being the only current active one in this regard), the UFC would survive. I would surmise, however, that the red ink period for the other organizations (primarily BoDog fight and the IFL) would probably expand and the owners of both groups would seriously have to think whether it’s worth having a virtual money pit.

    In my mind, the IFL’s policy, while noble at a first glance (trying to establish market shares in different markets through promoting the city team structure) is heavily flawed because they are basically trying to force feed fans their product in regions which have seen limited, if any, exposure to the product. Rather than building up a few key territories and an expanding fanbase over time, they are basically renting large venues and trying to present a ‘big time’ atmosphere when they are doing rather poor business even after papering heavily the venues. It’s always better, to paraphrase a promoter or matchmaker, to make a televised show look sold out in a 3,000 seat venue than to be a quarter full in a 20,000 seat venue (like The Forum in LA). In addition, it’s better to try and minimize the red ink in the early investment years than to blow wads and wads of money on the slim chance that every will be returned and a positive return on investment will be made in the future.

  3. The MMA Critic says:

    Based on the IFL’s TV deal in 2007, they should be losing a lot of money this year as well. That $22 Million of raised capital will only last so long at this rate.

    Bodog uses the marketing budget of their casino business to fund MMA. I can’t imagine it being a long term thing. And honestly, they haven’t tried to make a huge splash either.

    Pro Elite is being funded by Showtime. After they have their first PPV, and it gets 30,000 PPV buys, you have to wonder how the executives at Showtime (and CBS) will start to look at this business. And that could be an honest estimate based on how Pride, Bodog, and various other MMA promotions have done in the past. Even if they do 50,000 buys for $40 for each. Typically the company would get 1/2 of the PPV gross, which means they would only be bringing in $1 Million. The live gate won’t be high if the tickets are sold like this event, and even some of that money will go to the arena. There is almost no question it will be a loss.

    The UFC is having $2 Million gates with Anderson Silva vs. Travis Lutter. How is anybody going to break that without spending $10 Million Liddell or Ortiz to fight for their main event? And when they do, they will still risk a complete failure.

  4. Tomer Chen says:

    Based on the IFL’s TV deal in 2007, they should be losing a lot of money this year as well. That $22 Million of raised capital will only last so long at this rate.

    I agree. $22 million is really not a lot of money when you are running rather large venues like the Rose Garden Arena & the LA Forum with generally unimpressive turnouts. It’s better to run with venues of up to 5,000 seats and get it mostly (or completely) filled than to run 15,000 seat venues where you only get it filled to maybe 30-35% of capacity, given that the larger the venue is, the larger the overhead costs and the more ‘bush league’ feel the organization will have if half or more of the venue is empty. Heavy papering isn’t a good sign, either.

    Bodog uses the marketing budget of their casino business to fund MMA. I can’t imagine it being a long term thing. And honestly, they haven’t tried to make a huge splash either.

    In a way, Calvin Ayre is sort of like the Fertittas (Zuffa) in that he has a gambling business as the primary supplier of funds. However, the difference between the two (in my mind) is that Ayre seems to be running BoDog Fight purely out of a Vince McMahon-style “I can be successful in anything!” ego trip without really considering the financial model(s) or feasibility of the game plan, especially given that the mainstream media in the US is primarily focused on the UFC (with some exposure to the IFL, mainly due to their publicly traded status). Numerous people in the past who were generally very successful businessmen (like Steve Wynn) bombed when they tried their hand at Boxing promotion. I can’t see it going any different for Ayre.

    Pro Elite is being funded by Showtime. After they have their first PPV, and it gets 30,000 PPV buys, you have to wonder how the executives at Showtime (and CBS) will start to look at this business. And that could be an honest estimate based on how Pride, Bodog, and various other MMA promotions have done in the past. Even if they do 50,000 buys for $40 for each. Typically the company would get 1/2 of the PPV gross, which means they would only be bringing in $1 Million. The live gate won’t be high if the tickets are sold like this event, and even some of that money will go to the arena. There is almost no question it will be a loss.

    This is another aspect of the promotional game that many of these organizations and individuals don’t understand: you can’t simply start at the top of the food chain and expect to sell out the Pontiac Silverdome and bring in 500,000+ buys from the get go. You have to develop the organization from the bottom up and get both the brand name (long term development of the organization) and the fighter names (more short term, but can last semi-long depending on the ring age of the fighter as he approaches later in his career, the losses, etc.).

    The UFC is having $2 Million gates with Anderson Silva vs. Travis Lutter. How is anybody going to break that without spending $10 Million Liddell or Ortiz to fight for their main event? And when they do, they will still risk a complete failure.

    And given the fact that the UFC has a goldmine with guys like Liddell and Ortiz, you won’t see the UFC let them go so easily. Even if they ‘retire’, the UFC will have them participate as a color commentator or as PR people or something so that they can lock them up and prevent them from actively fighting for the competition. For all the bad things one can say about Don King, Bob Arum, etc., they understood one thing: you need to keep the top guys (or close to top guys) next to you until they are used up and would prove to be minimal draws (if at all) by the time a lesser promoter got their hands on the fighter.

  5. Boxing Daily says:

    I think one of the main reasons why the UFC is doing so well is because of the fall in interest in other combat sports.

    Wrestling used to be hugely popular but that has faded away.

    Also boxing, especially in the Heavyweight division, is a shambles at present, so combat sports fans are turning to thing like the UFC as it is better quality.

  6. AJAX says:

    The growth of the UFC is great for MMA in America, but I can’t help but think about how weak their fightcards are compared to Pride’s. To me it’s night and day, plus the fact that the UFC’s two hottest prospects are both guys who lost their title shots in Pride. Doesn’t that say something to you people? Obviously it doesn’t because from what I’ve seen it’s not really discussed here. If the UFC’s biggest asset is the fact that they are marketing mogels for MMA, then shoulden’t hardcore Fans like most of the people who visit this site see the mediocre fights through the generated publicity?

  7. Tomer Chen says:

    Also boxing, especially in the Heavyweight division, is a shambles at present, so combat sports fans are turning to thing like the UFC as it is better quality.

    While I do agree that Heavweight boxing today is pretty horrific (and that there needs to be another unified champion like Lennox Lewis was to really draw up any potential interest in the division again), I disagree that the overall product is dying. Fighters in the smaller divisions such as Oscar De La Hoya, Marco Antonio Barrera & Manny Pacquiao are still bringing in fans (albeit not the record numbers that fights like Tyson-Holyfield II or Tyson-Lennox did) to the sport. Of course, the fact that they are smaller guys and the fans have historically been brought up to snub smaller fighters for bigger ones (even if they are more talented) does create a ceiling of sorts (though De La Hoya did break through the ceiling through his recent big drawing PPVs and the Trinidad superfight that is one of the biggest drawing cards of all time).

    The growth of the UFC is great for MMA in America, but I can’t help but think about how weak their fightcards are compared to Pride’s. To me it’s night and day, plus the fact that the UFC’s two hottest prospects are both guys who lost their title shots in Pride. Doesn’t that say something to you people? Obviously it doesn’t because from what I’ve seen it’s not really discussed here. If the UFC’s biggest asset is the fact that they are marketing mogels for MMA, then shoulden’t hardcore Fans like most of the people who visit this site see the mediocre fights through the generated publicity?

    The funny thing about MMA and, really, combat sports in general is that some of the biggest drawing fights of all time were matchups that, on paper, were pretty bad matchups in favor of one side (Lennnox Lewis vs. Mike Tyson, Mike Tyson vs. Evander Holyfield I, Jack Dempsey vs. Georges Carpentier, etc.). Why? Because the promoters and the fighters were more than capable of creating the image that the fighter that on paper was likely to be slaughtered would really bring the fight to the opponent and was the true challenger to the crown from all those that were available at the time. While often it ended up as one sided as expected (such as in Lewis/Tyson and Dempsey/Carpentier), the fans ate up the ‘super fight’ status that was promoted between icons of the era and were willing to sell out large venues or buy massive amounts of PPVs to see the contests.

    Certainly the UFC fight cards are, often, weaker on paper than one would like to see, mainly because of the fact that the UFC knows that as it is, they are riding a wave of success and can afford to present less than great (un-televised) undercards because the strength of the top 2 or 3 matches or a certain fighter or two will bring in the fans in droves. As I mentioned above in my article, I do think the UFC will have to get more quality fighters and not just journeyman or untested (IE: fighters who basically beat up a bunch of guys in KOTC) fighters in order to fill in the void of the current top dogs (Liddell & Ortiz) or to expand the image of the UFC only bringing in the finest instead of having pretty horrible mismatches (such as Cro Cop-Sanchez).

    As for Cro Cop and Rampage being ‘leftovers’, I would disagree heavily, especially considering Cro Cop won the 2006 PRIDE Absolute Grand Prix last year and was pretty competitive with Fedor for the first round in his title fight (moreso than Nogueira ever was in 3 fights with him), but faded badly down the stretch. And while Rampage did lose twice to Wanderlei Silva (once in a title defense and once in the finals of the 2003 PRIDE Middleweight Grand Prix) and once to Mauricio ‘Shogun’ Rua, I would also argue that Rampage did decimate most of the Middleweight division of the period (beating top guys like Ricardo Arona & current UFC LHW champion Chuck Liddell), only losing to the top 2 guys during his peak years during the organization (not including his dominating performance against Sakuraba until Sakuraba managed to get his back while he was inexperienced or the flaky DQ loss to Matsui given that Silva was given a ‘No Contest’ against Yvel for the same situation).

    In any case, overall the true litmus test of a successful promotion is the money, not the quality of fights (that’s what the promoters and matchmakers are trying to make, after all; great matches are secondary to the almighty dollar, sad as it may sound). After all, the most successful Pro Wrestling in the world today (and overall the most successful in history) is the WWE, which, from a technical wrestling standpoint is rather poor and there are numerous organizations who draw several hundred fans or less that overall produce better quality matches but are not the more successful organization simply because they don’t bring the money in that the WWE does at the end. I would say PRIDE on the average does have a higher quality of fighter, although there is a mixed bag when it comes to the quality fighters actually facing other top fighters and there are also freakshow fights that PRIDE presented on their undercards (such as Giant Silva and Butterbean), so it’s not exactly like PRIDE is packing their cards top to bottom with exciting, competitive matchups between 2 top 10 guys in the division. Really, though, smart matchmaking dictates that the undercard be less competitive matchups given that the more talented fighters tend to command higher purses and many managers and promoters want to promote new blood with potential to the large live audiences if not the televised undercard.

  8. […] 2: Found a great, marketing-led post on the UFC here at Fight Opinions. A length article, but well worth a […]

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