Jury Still Out on UFC's Facelift

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A decade after the Ultimate Fighting Championship mixed martial arts franchise burst on the pay-per-view sports scene — amid controversy and eventual condemnation from cable operators — a new, more rules-dominated version is quietly trying to recapture some of the sport's old PPV glory.

With six events a year — including its 40th iteration in November — and ongoing negotiations for a new television deal, UFC executives are hoping to once again become a major player in the PPV category.

Initially launched by Semaphore Entertainment Group in November 1992, the UFC, which touts a no-holds barred, fight-to-the death format with very few rules, quickly became an immediate PPV hit in terms of buy-rate — often rivaling more established franchises like boxing and professional wrestling.

"It was a novelty that generated a lot of fanfare and media interest," said TVN Entertainment Inc. senior vice president of PPV and sports programming Michael Klein.

But the franchise ran into political trouble in 1997, when the New York State Athletic Commission became the first of several regulators to ban UFC events due to excessive violence, even though none of the fighters had ever been seriously hurt.

Subsequently, operators, one by one, refused to offer UFC. Eventually, In Demand LLC — then called Viewer's Choice — dropped the sport altogether.

"The early owners really did the franchise a disservice because they marketed the extreme angle too much, to the point that operators began to worry about community pressure," said Klein, who, as the programming executive at Viewer's Choice, made the decision to pull the plug on the UFC.

For several years, the UFC could only be seen on direct-broadcast satellite services. But Nevada-based, independently owned Zuffa LLC bought the franchise from SEG in January 2001 and totally revamped the organization.

Once a renegade outfit, the UFC is now billed as a leading mixed martial-arts association in which athletes combine fighting techniques such as jujitsu, judo, karate, boxing, kickboxing and wrestling.

Self policing

The new UFC now adheres to a "stringent" set of rules, which include commission-approved gloves, weight classes and mandatory drug testing.

To make the competition even more uniform, only commission-approved MMA shorts and kickboxing trunks are allowed in the ring.

Yet even with the changes, UFC president Dana White said the organization initially had a difficult time shedding its no-holds-barred image. The major breakthrough came during the summer of 2001, when two powerful and influential regulators — the New Jersey Athletic Commission and Nevada Athletic Commission — both recognized the UFC as a legitimate sport.

The Louisiana and Florida athletic commissions also sanction UFC events. Another sign that the sport is gaining legitimacy: Las Vegas casinos are taking lines on the organization's Nov. 22 PPV event, according to White.

Within nine months of its revamping, In Demand began carrying the new and improved UFC franchise.

"We were very pleased with a lot of the moves that the company made to nurture its growth," In Demand senior vice president of programming development Dan York said.

To further boost awareness, UFC hired PPV marketing firm Team Services to tout its product to cable operators.

While UFC's five PPV events in 2002 have performed decently — averaging from 50,000 to 60,000 buys, Team said — the company hopes to break the 100,000 mark within the next year.

Team Services president Bonnie Werth admits the organization faces an uphill battle to shed its outlaw brand within the industry, adding that many operators don't even know the UFC is back on pay-per-view.

"Zuffa has worked hard to create rules and regulations to give it more credibility and viability," Werth said. "The challenge is to build mixed martial arts as a legitimate sport and to build UFC as the premiere mixed martial arts organization in the process."

While it's still too early to judge the PPV appeal of the new UFC, Millenium Digital Media senior vice president of marketing and programming Peter Smith said the more sanitized version certainly makes it easier for the MSO to distribute the events.

"We have a duty to our customers to provide responsible programming," Smith said. "The fact that the UFC is a more orderly event makes it easier for us to sell."

Another operator executive who wished to remain anonymous added that he'd trade a few less buys for the lack of controversy that the new UFC garners.

"The numbers that we've seen in the new format have been respectable, but there's certainly less controversy surrounding the event," the executive said. "I can see it becoming a consistent source of [PPV] revenue for us."

Seeking viewers

In order to achieve its goals, the UFC will have to market to an audience that is decidedly different from those that found its former form appealing.

Instead of the young, predominantly male audience drawn to popular "sports-entertainment" entities like World Wrestling Entertainment, White said the UFC's audience is the true sports fan — a bit older and interested in competitive pursuits like boxing and collegiate and Olympic wrestling.

"The people who purchase our events are boxing fans and combat fans," White said. "The WWE fans are more into the soap-opera aspect of the event."

Added Werth: "Those who really wanted the blood sport of the old UFC are not our audience. I certainly expect to capture the imagination of the boxing fan."

UFC has already attempted to reach out to sports fans by airing two events nationally on Fox Sports Net last August — the first time the organization has appeared on television outside of PPV.

The shows performed well, averaging around a 0.8 between them, and generating higher ratings than FSN's regularly scheduled boxing series.

The organization also received top billing during a summer episode of FSN's sports-talk show The Best Damn Sports Show Period.

UFC wants to have a network distribution deal in place by first-quarter 2003 to supplement its PPV shows, said White.

"We're talking to two or three networks about a television deal and we hope to have one in place by March," said White, although he refused to reveal specific details. "We have to get our guys on free TV and build up their awareness."

Fox Sports Net confirmed that is considering an expanded role with the UFC.

"We were happy with the results and we're evaluating what we're going to do in 2003," Fox Sports Net director of media relations Tom Chiappetta said. "We know there's an audience out there."

Going beyond cable

The organization also plans to build awareness for what it considers its highly skilled athletes through other non-cable ventures, White said.

UFC has already launched a line of video games that have become strong sellers on both the Microsoft Corp.'s Xbox and Sony Corp.'s PlayStation consoles, he said. Several UFC stars will also appear in an upcoming film starring international martial arts star Jet Li.

"Right now, we have seven or eight guys that we've determined could be breakout stars," White said. Those names include Tito Ortiz, Ricco Rodriguez and Matt Hughes.

Given its ambitious plans, In Demand's York believes the organization has a tremendous amount of upside, which will ultimately benefit the cable industry.

"The product is far more sophisticated that it was during its first incarnation," he said. "The first UFC was like Toughman, but this version is much more polished and there's no doubt that if it stays the course, it can become a major PPV player again."

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