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« | Home | »

A lot of nervousness right now

By Zach Arnold | August 27, 2008

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So, I’m writing an article that will be posted soon at MMA Memories talking about the state of the MMA industry. Nobody has ever accused me of being Mr. Sunshine, but I can’t recall a more perilous situation for MMA organizations outside of Zuffa LLC as I can right now at this moment.

A lot of people could find themselves unemployed very shortly. In fact, the theme of the article I’m writing revolves around the possibility that five promotions could be out of business within the next 12-18 months. When you consider that Elite XC has basically (in my opinion) killed off several promotions with their failed attempt at a farm system, the damage done to the MMA industry is widespread and global. Money marks aren’t just going to suddenly pop up and prop up this high-risk business.

My greatest fear is that the MMA boom is dying and that the business in the next year will resemble what professional wrestling looks like right now with WWE as the only major player. Dana White can continue to say that UFC will be the biggest global sport within the next 8 years, but history indicates that UFC will be dominant… however, only in a WWE-type mold and not anything else. That’s great for UFC and probably simpler for your casual MMA fan who doesn’t want to get burned out with multiple promoters and garbage, money-losing shows getting booked. However, this is a terrible predicament for fighters and people inside the business who are trying to hang on for dear life and make a living.

Once the money starts drying up and UFC starts running out of slots to book fighters (they can’t act like Mother Theresa and hire everyone), the big question will then become: can the industry grow? We’ve seen a trend of amateur wrestlers and athletes, who used to choose professional wrestling, instead make the transition to MMA because of how much money is at stake and how much less punishment your body takes as an MMA fighter as opposed to being a professional wrestler. However, once the money starts drying up in MMA, so will the sport’s growth. And that’s a major problem.

I’m concerned about where the business is heading, due in large part to the irresponsible and selfish actions of money marks and hustlers who have torched the business. They got their cut of the pie and left everyone else to clean up their mess. Unfortunately, the pie is starting to shrink while the messes needing to be cleaned up will grow voluminously.

(For the record, Japan is in worse shape right now than America in terms of the fight game. Really bad shape.)

Topics: Japan, Media, MMA, UFC, Zach Arnold | 34 Comments » | Permalink | Trackback |

34 Responses to “A lot of nervousness right now”

  1. Rollo the Cat says:

    I am not buying the doom and gloom simply because when you look at how past and current promotions have screwed up, you realize that things could be done so much better. The market didn’t kill of these promotions, the promoters did.

    There will be plenty of people willing to make an investment in local and regional promotions. From there, they will either have to be content with their position or sit and wait for a chance to go big time.

  2. Michaelthebox says:

    I don’t think you need to worry about the long term health of the sport. Even if the boom is over, there is still plenty of long-term growth potential, as the sport continues to penetrate various markets and older non-fans are replaced by younger fans. Things will suck for a while as a lot of people in the industry are out of a job, but Zuffa will continue to grow and hire more and more people. Moreover, as all the fat, easy MMA promotions crumble, that will leave more room for leaner, meaner MMA promotions to take their place.

    This assumes that the UFC holds on, which it should. If the UFC cracks, MMA is in very deep trouble.

  3. Ditch says:

    So much depends on timing. For instance to use the wrestling analogy, if ECW had held on a few months longer in 2001 it might have captured a chunk of WCW’s audience and survived. If two or three US MMA promotions fold, the others will get a share of the revenue and talent, increasing their chances. However if nobody folds for too long a time then the survivors of the first collapse might not have the strength to capitalize. With credit markets the way they are, if all the non-UFC feds close it will be very hard for new ones to open and take advantage.

  4. cyph says:

    The MMA boom never died. It’s just greedy organizations without proper business plans are dying.

    If Affliction and EliteXC fails, then it simply means that they failed. These two organizations have made enough mistakes to bankrupt themselves several times over.

    As long as there’s a profitable market, some new organization will come in, learn from the mistakes, modify their business plan, and try again. That’s the capitalist way. Eventually, someone will get it right.

    That is not to say they can challenge the UFC right away (that’s a stupid thing to do anyway). They’ve got to start small and grow slow. It’s okay to play second fiddle to the UFC. Even the old AFL took 9 years before it achieved parity with the NFL.

    Sure, salaries will have to come down to earth. The problem is that Affliction has grossly inflated salaries right now. Sylvia gets paid 800k! Fedor gets paid 1.5m! Something’s got to give when there are no fundamentals to support this.

    A living wage for under card fighters is a concept invented in an MMA fan’s wet dream anyway.

    MMA isn’t that big… yet. MMA won’t blow up until this generation’s teens grow up. The Internet downloaders of today will one day be the PPV buyer of tomorrow. It takes patience… the sport won’t grow that fast, no matter how much Affliction is willing to throw money towards it.

  5. The Citizen says:

    Slice V Shamrock is going to revitalize the entire industry — just you all wait and see! Once Brett Rogers steps up, new promotions will be created, looking for the New Brett Rogers, thus saving the MMA landscape from here to Japan.

  6. MessiahRp says:

    Zach,

    I’m not sure that the Wrestling Boom analogy applies. During the last boom, Wrestling’s audience peaked during the Monday Night Wars due to a sense of head to head competition and before the internet had caused everyone to be aware of sheets. The sense of unpredictability of the two products trying to one up another with angles, matches and talent acquisitions is something we haven’t seen since and may never see again.

    I think we also must remember that there while there are still hardcore boxing writers/fans that may dismiss MMA as a legit sport and not cockfighting, the overall consensus in the country is that it is legit and the work that goes into it is incredibly difficult.

    Think MMA hasn’t reached beyond an inflated MMA fanbase? Ask around and you’ll see a number of women aware of who Chuck Liddell is because many of their favorite stars are using his training methods as some sort of exercise fad.

    There’s a different reach with MMA then there was with WWF/WCW. Even though there were celebrities that enjoy wrestling there was with them and there is with average fans still a need to explain “why” those fans like wrestling. There is a built in stigma with wrestling revolving around how fake it is or how dumb the stories are and people think of it as lowest common denominator type of stuff.

    MMA used to have a similar stigma but with ESPN beginning to accept it as sport and putting out results to big fights, with sports pages across America starting to take notice and with celebrities everywhere proudly attending (because they never have to explain why they like it and be embarrassed to admit so), this has the ability to breakout of the stigmas that usually end popularity booms.

    That being said the above posters are right in that UFC’s competition will go out of business due to poor business decisions rather than for the MMA itself. Affliction will last longer than it should as long as it has a money backer because of the names involved but because of other poor decisions like how much they overpaid most involved, how much they likely spent on a washed up Megadeth concert that was completely uninteresting outside of core Megadeth fans and that gigantic ring, the poor announce team, the poor mic job on the audience, those were the only things that really hurt the show and might hurt them down the road. Not the MMA itself.

    Let’s put it this way… if Kimbo Slice can become a household name and a big star just by being a star promoted on a third tier MMA show, the sport is big enough to outlast a few poorly run companies.

    Rp

  7. Fightlinker says:

    I agree that it looks like we’re about to lose a ton of the second tier companies, but I don’t think it’s going to cause the end of the boom. The boom was caused by the UFC, and won’t bust until the UFC busts. Sure, with less competition they’re liable to do more dickhead things which will in turn result in the end of good times, but it’s in their hands.

    Looking forward to the full post. Glad to see you writing more red meat POSTS as opposed to red meat links!

  8. Rollo the Cat says:

    The real long term growth of the sport is going to come on the grass roots level, from what were formerly Karate and TKD “McDojos”.

    How many kids growing up, went to karate class, if even for a one month? Plenty. Now, karate schools are starting to teach ground fighting as a supplementary skill and some are even having full grappling and JJ classes. This means future generations of fans who understand the sport.

  9. David says:

    Great article and great comments, thanks to everybody.

    UFC, Affliction and K-1

  10. MMA Game says:

    Elite XC have certainly done a lot of damage to the market but it’s cyclical. Regional promotions will grow again and reach the sort of level which ICON were at, without much trouble. It is definitely becoming more difficult for people to challenge the UFC though.

  11. MJC_123 says:

    The dust has truly settled, the boom is no more…what was once niche, exciting and new has become part of the furniture. The deterioration of MMA has an awful lot to do with over-exposure of the sport, I remember a time only 18months ago where weeks would go buy without any action live or on telly.

    Now a day doesn’t go buy without someone broadcasting a brand of MMA…

    TKO MMA/HARDCORE FIGHTING CHAMPIONSHIP/Cage rage contenders/Cage Fighter….all of this gives even the hardcore fan super burn out…Coupled with the fact the UFC are putting on sub-par events with 2 headline matches and the rest filler and yes I can also see MMA disappearing up its own a&&.

    Shame

  12. Jeremy (not that Jeremy) says:

    Elite XC was a real gamble that I think was screwed up by bad management. Strategically, they were doing what I thought needed to be done to create a legitimate competitor to UFC, but tactically it was a complete disaster.

    We’ve still got Strikeforce out there, and it’s possible that we’ll see some of the smaller dormant promotions make a comeback to fill the gaps left by the disappearance of KoTC and Icon. Maybe Rumble on the Rock will return seriously, although they would pretty much have to pick up one or two of their former stars who are currently under contract with UFC to have a decent shot, I think.

    There are enough disgruntled fighters out there and female fighters to ensure that there will always be a pool of fighters available to someone who seems to be able to put together any kind of promotion and whose checks won’t bounce.

    And who knows, maybe if UFC really does manage their international expansion to the developing world, there will be many more slots open for fighters.

    We could also see a permanent move to two UFCs a month, with either a foreign or UFN event plus a normal north American PPV each month.

  13. Brandt says:

    A lot of people in the industry are worried now with the recent EXC filing, the Affliction PPV numbers (or lack thereof considering Atencio never released them – not that he was required to), the Japanese scene, and the thought that one of the better smaller national promotions, King of the Cage, may be in jeopardy thanks to EliteXC’s financial troubles. I’m still a bit worried even after Lappen went on Hardcore Sports Radio and said that KOTC has always been a money making promotion.

    I won’t lie, I’m a little worried that we’ll only have the UFC and a handful of small regional promotions to choose from.

    Good luck EXC on 10/4!

  14. Kelvin says:

    Fightlinker hit it on the head IMO.

  15. Alan Conceicao says:

    I’ve said many times that I don’t see MMA and pro wrestling as similar. The current boom period in MMA is nothing like either in pro wrestling either in the 1980s or 1990s in terms of the dynamics. The sport itself has seen a number of promotions come and go. What I think is troublesome is the attitude that MMA as it is right this moment is as it will always be. Its a sort of stunning “End of History” type view that makes no sense given historical analysis of any sport in history. Given the age of MMA and that its time in the mainstream spotlight isn’t even at the 5 year mark, I’m not about to pretend there are not paradigm shifts ahead.

  16. Garret says:

    Ditch, there’s no way ECW would have grabbed the attention of WCW fans in 2001 since they lost their national television deal.

  17. klown says:

    This kind of post is the reason I come to FightOpinion.com. And intelligent posts generate intelligent commentary.

  18. Luke says:

    I agree with Fightlinker as well. Good to see you writing meaty articles Zach.

    I’m also in agreement with the idea that these promotions went out of business because of their own mistakes, not because interest in MMA turned to dirt.

  19. 45 Huddle says:

    I actually think EliteXC will have some rating success in October. Kimbo/Shamrock will almost guarantee this. However, I still don’t see how they are going to make money.

    They are going to be running a PPV in 2009. They really should have saved Kimbo/Shamrock for that card. As it stands right now, there is nothing to get fans to buy the card. And without PPV, their is no way for the company to have long term success. CBS will always be quick to pull the plug on the company after 2 bad showings in a row.

    So when people complain about Dana White not taking certain TV Deals, he looks more and more brilliant. What he wants is networks DEVOTED to the UFC (like SpikeTV is). Not networks who are willing to drop the company anytime it doesn’t do exactly what they expected (like CBS).

  20. Cory says:

    This post may be intelligent, but it doesn’t mean it’s accurate.

    The truth is the UFC is in the driver’s seat for the entire sport. If they land a network deal and get their events advertised between NFL plays on FOX, the growth boom of UFC MMA will skyrocket. The fact MMA has even had a boom while operating strictly on a pay per view model with some smaller programming on FOX speaks to the marketing savvy of Zuffa. At some point, a network is going to take the sport to the next level, and right now putting EliteXC on CBS is akin to putting the AFL on NBC. That *isn’t* all that the UFC is capable of.

  21. Cory says:

    Correction to my previous post:

    I meant to say “smaller programming on Spike TV”

  22. D.Capitated says:

    The difference is that Arena league would have the highest rated football game in history and another solidly in the top 10. So, its nothing like that, actually. As for the UFC wanting a channel devoted to their programming as much as they would be the NBA or MLB, for instance, well, you can dream about it. That’s the extent of that fantasy.

  23. Ultimo Santa says:

    If Shamrock beats Kimbo, it sets up the perfect PPV fight:

    Ken Shamrock vs. Kimbo’s trainer, and long-time rival Bas Rutten.

    If Kimbo wins…I have no freaking idea. I don’t think Slice/Rogers feels very PPV-quality (although I’d tune in to see it).

  24. Peter H. says:

    Really good read.

    My question though, is how are the smaller MMA organizations in Japan (SHOOTO, Pancrase, and DEEP) going to fair? Are any of them in any real trouble of fading away?

  25. Zack says:

    The next big step for MMA is the mainstream media actually educating themselves on the history of the sport and demanding the best to fight the best.

  26. MJC_123 says:

    f course CBS in October will draw massive ratings, free, glossy MMA, featuring Kimbo Slice vs WWE legend Ken Shamrock.

    But if you make it customary that \”freak show\” MMA is the answer, then surely that becomes the only way of survival. So we start bringing in all sorts of Monster\’s, granted Pride used to do this but at least they had a talent pool.

    The big worry is Affliction, if they didn\’t have already created hero\’s such as Barnett, Arlovski and the cash-consuming Fedor….what would they be promoting?

    Elite XC will survive, the mainstream T.V demands, blood, freaks, fighting and women (Gina)…..but if Affliction goes under thats the worry….

    I predict in a years time.

    Dream has consumed Sengoku
    Only one big player in Japan.

    Affliction is vague on its commitment, long term…no events planned.

    Elite XC survives on maybe even a more regular basis, but CBS demands squash matches, WWE style programming, blood etc.

    The UFC survive but we are on 2 PPV\’s a month, and the talent is spread thinly between them.

  27. 45 Huddle says:

    It feels like Affliction has lost all steam that came out of their first show. Their second show has a lot of avergae fights, and Arlovski/Barnett alone can’t sell the PPV.

    I don’t think we will see the UFC become spread too thin. By 2008, they will have 11 Current or past World Champions, 12 TUF Champions, and a host of supporting fighters like Brock Lesnar, Josh Koscheck, and Wanderlei Silva. There is more then enough talent to put on 24 cards in a year. And I have a strong feeling that only half of those shows (one per month), will be on PPV.

    The big question is what happens to the Heavyweight Division when Japan is half collapsed and Affliction is done. A lot of their Heavyweights will have to take a paycut in order to fight for the UFC. Will they really want to do that? I doubt it, which means the Heavyweight Division will nearly be dead.

  28. cyph says:

    The heavyweight division has always been pretty crummy. Pride created an illusion of super heavyweights because they had their top heavyweights fight cans to build their aura up. In Pride, heavyweights fighting middleweights and 0-0 or 1-0 newbies were a normal occurrence. Pawel Nastula, we hardly knew ya.

    Most fans still look at the Pride heavyweights as the best in the world because the division was so thin, and Pride manufactured their own supermen by feeding their fighters cans.

    I expect some of the new prospects from the UFC will dominate for some time because they are natural athletes with a solid base. They are well rounded with the exception of Lesnar. It’s no accident that Cro Cop, a Pride open weight champion, were dominated when fed top competition. Fans need to see through the illusion. Stars were made in Pride, and heavyweights were the weakest division but manufactured to look like the best.

    Affliction has taken the weakest division in all of MMA and made it their centerpiece. They overpaid fighters who they thought they could build their promotion around. They were wrong. I think Affliction were too much of a Pride fanboy to recognize that heavyweights from Pride were smokes and mirrors. I can’t blame them, even Dana White fell for it.

  29. Fred says:

    I think that every single MMA promotion which has gone out of business deserved to go out of business. I’ll exclude PRIDE from that statement somewhat, because at least PRIDE put on a very good series of cards even though they had bad management and problems with the yakuza in Japan.

    The mistake that most MMA promotions are making (especially the American ones) is to try to compete with the UFC right off the bat by grabbing big names; paying them exorbitant salaries; and trying to steal the UFC’s thunder from the get-go. Very few promotions are paying attention to how the UFC actually became successful—i.e. developing strong up-and-coming fighters and paying them very modestly while building the brand itself. It’s not a “popular” formula; but it works. According to the Zuffa model, it takes about 5 years and 30 – 40 million dollars to build a first-rate, international MMA promotion. And that 30 – 40 million has to be spent mostly on the brand. The UFC branded the Octagon, “as real as it gets”, the TUF show, etc. That’s really the way to do it. All the fan-based idiocy about paying fighters more money is meaningless if promotions themselves can’t stay in business.

    Most of these failed promotions are into grabbing ex-UFC fighters (who washed out of the UFC) and well-known B-level fighters and paying them huge salaries, hoping their handful of famous fighters will carry the promotion through. That model won’t give a promotion enough durability to compete long-term. We saw the WFA go down. And then Bodog. Then the IFL. And now, EliteXC is against the ropes. It’s doubtful that Affliction or HDNet fights will last either, because they are cutting the same corners and trying to gimmick their way to instant success through ex-UFC talent.

    You have to build the brand first. Spend the money on that and develop talented, hungry fighters who aren’t demanding $2 – 6 million a fight. Uninformed nuthuggers will scream about fighters making $10,000 a fight, but that’s really they way to build a survivable brand.

  30. D.Capitated says:

    HDNet Fights is a totally different business model than the UFC, IFL, etc. They’re likely to stay in business for a long, long time. I mean, it starts with the fact that they are not a promotion.

  31. Fred says:

    HDNet fights put together fights like Trigg vs. DeWees (both ex-UFC guys). Cuban showcased Pete Spratt. Cuban also had his nose up Randy’s ass and would have paid him a fortune if Randy had been able to get out of his UFC contract.

    It’s true enough that Cuban is positioning HDNet fights as a medium for broadcasting other promotions, so he’s making it a broad, diversified operation. However, as far as the actual MMA we’ve seen from them goes, HDNet Fights is still cutting corners and trying to coast on ex-UFC big names, rather than trying to legitimize their brand as a viable MMA promotion. They cannot succeed as an MMA promotion that way.

  32. Dave says:

    Zach, this more or less got me to offer a form of rebuttal to you on the Total MMA main page.

    I think we have seen a lot of bad business decisions and business practices, and luckily enough, they have been public companies, so we get to read their SEC Filings to see how bad their mistakes are. There are people who know how to make money with MMA, and those that study IFL and EXC’s shortcomings will only be able to learn and promote smarter.

  33. D.Capitated says:

    HDNet also hasn’t run an MMA show on their own in 9 months (and the ones they did run looked to be in tandem with Art of War). They would like to have Randy as a contracted fighter, but it doesn’t necessarily make them a promotion any more than having Oscar De La Hoya under contract makes HBO a promotion. They have been televising fight cards from the US, Canada, and Japan for all of 2008 and basically running off the model used by Fox Sports Net, ESPN, HBO, and Showtime. The comparison simply isn’t apt.

  34. liger05 says:

    Zach in terms of Japan is it the case we may now see more amateur wrestlers in Japan go to pro-wrestling like they used to cos of the MMA boom being over?

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