Despite Losses, SEG Pushes On with UFC


New York -- Encouraged by the performance of its Oct. 16
event, Semaphore Entertainment Group will continue with its Ultimate Fighting
franchise, despite a lack of support from most of the cable industry.

Although it is losing millions of dollars with each event,
the company has scheduled a Jan. 15 event from Birmingham, Ala., company officials said.
Nevertheless, the controversial mixed-combat ring sport has taken a financial toll on SEG,
which recently let go of several key executives within the organization.

The Oct. 16 UFC event from Brazil generated around a
0.5 to 0.6 percent buy-rate from both cable and direct-broadcast satellite -- one of the
company's higher-performing events of the year, Meyrowitz said. But with only 13
million to 14 million households receiving the event – fewer than 8 million from the
cable side -- SEG still lost money.

"The buy-rates most likely increased because of the
restricted [universe]," Meyrowitz added.

Most of the cable industry, including Viewer's Choice,
is not distributing the event, primarily due to its perceived violence -- although the UFC
has since instituted several rules changes -- and because it is not sanctioned by the
major state sanctioning bodies.

Operators that carried the event said it performed around
expectations. Media General Cable of Fairfax County, Va., pulled in nearly 300 orders,
said Ted Hodgins, PPV manager for the system.

As a result of its huge losses, SEG was recently forced to
release several key executives, including Campbell McLaren, president of SEG Productions,
and chief operating officer David Issacs, Meyrowitz said. Also, Michael Abrahamson,
president of SEG Pay-Per-View, resigned last month to pursue other interests.

"Unfortunately some changes had to be made; it's
definitely a tough time," Meyrowitz said. "We've created an international
brand that has some problems right now, and it has drained us financially and emotionally,
but we intend to make it a success."