Business of Sport: UFC is now on the front foot

Alex Rea 8/03/2016
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A new look: (l-r) Reebok president Matt O’Toole, Lorenzo Fertitta and Dana White.

Conor McGregor fought Nate Diaz on Sunday in the Ultimate Fighting Championship (UFC). It is slated to break the promotion’s pay-per-view record as it raked in $8.1million from the gate alone, sandwiching itself between McGregor’s last two fights at $10.1m (UFC194) and $7.2m (UFC189).

Oscar-winning actor Leonardo DiCaprio was in attendance, NBA superstar LeBron James and pop sensations Justin Bieber and Niall Horan posted about it on their social media channels. Hard to believe then, given those eyeballs on the UFC now, that it wasn’t so long ago the landscape looked decidedly different.

At the tail end of 2013, the UFC simultaneously lost its two biggest and best-known stars – Anderson Silva to a gruesome leg break, and Georges St-Pierre to a sabbatical that resembled retirement. Together, their absence cast a long shadow over 2014 – one of the worst performing years in UFC history.

Belt holders Jon Jones and Cain Velasquez missed significant Octagon time, as did newer champions like Anthony Pettis, Johny Hendricks and Chris Weidman. It meant that PPV figures dwindled and interest in the sport of mixed martial arts was beginning to dry up.

Now, it’s important to note the company was still profitable with the cushion of all its worldwide television deals, but what was clear, is that the brand was embarking on a period of stagnation. In fact, one event in 2014, UFC 174, underscored this. It did between 95,000 to 115,000 PPV buys – the lowest level of interest for a UFC event in the modern era.

Fluctuations in the sports’ popularity are to be expected, especially given the constant injuries to key stars. Regardless, though, the proliferation of shows burning out the audience was an issue and 2015 was quickly shaping up as the most pivotal since the UFC’s inauguration in 1993. But if 2014 ended on a whimper, the following year started with a bang and concluded with the UFC experiencing a boom, closing with two of the top three biggest stars in combat sports in McGregor and Ronda Rousey.

Zuffa – the parent company of the UFC – saw the gamble of purchasing the struggling promotion in 2001, finally pay off.

“The sport is definitely becoming much more mainstream,” says Zuffa co-owner Lorenzo Fertitta at the unveiling of Dubai’s UFC Gym, the first of its kind in the UAE. “McGregor and Rousey are getting media attention that none of our athletes have had before.

“When you’re on the cover of Sports Illustrated, GQ and Rousey hosting ‘Saturday Night Live’, they are big pop culture moments that is taking our sport to the next level.”

Indeed, the UFC has experienced growth scarcely seen before in the sport of MMA. Yes, Rousey’s star was dimmed a little in her loss to Holly Holm in December, but by no means was it extinguished. The narrative has shifted from a story about dominance to one about trying to rise from the ashes of defeat. It is no less interesting and it’s for that same reason a humbled McGregor, who experienced his first UFC loss on Sunday, could also become an even bigger star.

Make no mistake, though, personalities like Rousey and McGregor are crucial to the company. It’s through their successes UFC president Dana White boldly claims “it’s the fastest-growing sport in the world, and it’s going to be the biggest sport in the world.”

Now, that’s hyperbole given football comfortably takes that crown but how does Fertitta quantify the promotion’s rapid rise? “We look at in a number of different ways,” he adds. “Overall popularity we’ve tracked by looking at demographic growth, growth in our fanbase from around the world, looking at ratings from around the world and how that compares to other sports.

“Obviously, PPV, ticket sales as well but when you look at any metric, to think that we purchased the company in 2001, from where it was, which was almost non-existent, to where it is today, on a global platform, broadcast in over a billion homes around the world and 49 countries around the world hosting these events on a global scale, I think just looking at it from that perspective, no other sport has made those strides.”

Arguably though, the biggest leap the UFC has made in the last 12 months has nothing to do with the fighters. First, is the introduction of a random drug screening program, run by the outside agency USADA, which has already changed and shaped the sport more than any mainstream stars and PPV figures ever could. It’s perhaps the most important thing that has happened to MMA, a sport long tainted by the spectre of performance-enhancing drugs.

Next was a clothing deal with Reebok. Initially there was a backlash to the exclusive sponsorship agreement that meant Zuffa-based fighters had to surrender their current sponsors for fight week. Some fans criticised the look of the merchandise, too, but sales numbers since its introduction in October indicate that the partnership is a glowing success.

“To be honest I was the architect of that to begin with, but I’ve always believed, and I think you’ll see it over the next three to five years, that it will become synonymous with the sport over time,” says UFC CFO Nakisa Bidarian.

“The UFC has been around for 23 years and athletes could wear whatever they wanted, whatever patches they wanted to put on and that’s been the perception of the fans, but more importantly who we are as athletes. What we are doing now is elevating the image of the sport.

“So what happens is, when there’s a TV company that wants to run highlights they’re more comfortable doing so because they’re not running a highlight of 40 different brands.

“I think there are fans that say that this is bad but Reebok beat their sales budget in 2015 by over 20 per cent and in 2016 they’re expecting to beat their long-term budget by 25-30 per cent. Sales have been great and they are a great partner. The service that athletes get at the events, never existed in MMA before.”

The drug testing and the Reebok deal will have an everlasting effect on the company. Amalgamated with the rise of new stars, those long-term plans will help to cement the world’s largest fight promotion as a genuine contender on the sporting landscape. With this new perception and mainstream legitimacy, what is next?

Well, acceptance to participate in the Olympics is on the agenda and the Games could provide an enormous promotional boon to the business while also elevating a sport stuck on the fringes of the world’s imagination.

“I think the Olympics is definitely the future for MMA. The IMMAF (International Mixed Martial Arts Federation) has been created and is based in Stockholm with over 50 countries that has a affiliations with that,” Fertitta adds.

“That’s growing fairly rapidly and look at the end of the day the Olympics is a business too. They are going to be looking for sports that appeal to a young demographic and this is what the people watch.”

You only have to look at Sunday’s exposure to support that argument.

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Fight Club: Diaz win over McGregor affects UFC 200 card

Alex Rea 7/03/2016
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Dreams on hold: McGregor.

UFC 196, otherwise known as the card that killed UFC 200.

Everything can change in an instant in the fight game. Jose Aldo found that out when Conor McGregor knocked him out in 13 seconds for the featherweight crown, and now the Irishman has been made aware of that, too.

Before Nate Diaz suffocated the mystique, McGregor spoke of grand climbs through different weight divisions. He made bold claims of delivering $1 billion in revenue and portrayed the image of a fighter equal to the world’s biggest fight promotion. As it turns out, though, there’s a reason the UFC introduced weight classes.

Although it was the same confident showman that entered the Octagon, it was evident early on that the notorious power McGregor possesses, does not quite translate at 170lbs.

Yes, he was dominant in the first round and yes, Diaz was being picked apart at times, as a cut on his right eye left his face a bloody mess at the first-round klaxon. But the Californian weathered that adversity, maintained his poise and executed like true martial artist when he saw his window.

Conversely, his foe was quickly realising that at welterweight, the guys are bigger, the hits are harder and when you take a stunning blow, the recovery time much longer.

Diaz was bloodied but he was by no means buried. He overloaded on the infamous death-touch left hand and in his own words his inefficiency was countered by efficient striking that made him desperate. Featherweight to welter is a huge jump and his fall equalled that gap, as Diaz sunk in the rear-naked choke in the second stanza after rocking “Notorious” with a big left.

“It is what it is. I was fighting a heavier man,” admitted McGregor. “He could take a shot and remain in your face. In the second I was hitting glove. He stayed in my face, capitalised on it. I make no excuses. I took a chance, I came up short.

“I have no regrets about coming up. I enjoyed the build up. It was an enjoyable fight. We were talking in there. We live and we learn. I haven’t stopped in a long time a crazy couple of years but I’m still enjoying it. I think UFC 200 is there for me, but I’ll figure it out in the morning. I’m heartbroken.”

McGregor’s undefeated UFC streak is now broken, too, but make no mistake, his star power is far from doused. True, the dynamic has changed and although we like to see arrogant people humbled, we enjoy watching them try to rise from the ashes of defeat even more.

So, where does this leave us? And more specifically, where does this leave UFC 200? We have the featherweight champ, who lost to a lightweight at welterweight, who is a natural 155lbs fighter who lost to the belt holder Rafael dos Anjos but proved his class at a division above.

There are a lot of moving parts and possibilities but make no mistake, July’s historic is the biggest loser.

A slated welterweight titlefight between McGregor and Robbie Lawler is a much glossier proposition than a 145lbs-defence against Frankie Edgar or Jose Aldo. For Diaz, however, what we may just see him challenge for gold of his own.

“You know what would make a lot of sense? This isn’t the fight I’m making; I’m just saying him and Robbie would make a lot of sense,” UFC president Dana White said. “His brother beat Robbie. Robbie is now the world champion, and Nate became very popular tonight. We’ll see what happens with Nate.”

Potential mega-fights for the future have been damaged by UFC 196 but that blow will be softened as it’s tracking to be an all-time blockbuster event for the promotion. The wound, however, remains.

The UFC was well on its way to eclipsing the record revenue streams of 2015 and though it will in all likelihood still get there, the challenge of putting together megafights for July just got tougher.

“In 16 years in this business, the one thing you don’t do is plan anything out,” White added. “Because you don’t know.”

Indeed, you don’t, and that’s the beauty of the fight game: everything can change in an instant.

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Twitter reaction: UFC 196 - McGregor defeated by Diaz

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UFC 196: Conor McGregor was stunned by Nate Diaz.

Social media, as ever, has gone into over-drive following Nate Diaz’s sensational win against in-form Conor McGregor in their UFC 196 Fight Night bout.

Here are the best of the tweets so far:

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