Mixed Martial Arts Builds Caged Momentum

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Professional wrestling continues to thrive and boxing, despite its organizational woes, still performs well in pay-per-view and on cable. But much of the buzz in the ring these days is around mixed martial arts, which shed its outlaw image by imposing rules and safety regulations and has become arguably the hottest sport of the first decade of the 21st century.

Mixed martial arts, or MMA, as the sport is known to millions of teen-age and young-adult males, allows for various attacking strategies from assorted fight disciplines. It is a genuine sport like boxing, but with an emphasis on entertainment values not dissimilar from professional wrestling. Unlike boxing or wrestling, the events typically take place in an octagon or cage, not a square ring.

“The video-game generation wants everything immediately — they are looking for action, strength and skill,” said Brad Diamond, senior vice president of sports and specials at Spike TV, one of basic cable's main MMA purveyors. “Wrestling is a soap opera with stunt men. Boxing can go 12 rounds with not a lot going on to the untrained eye as the fighters look to score points. But in ours, with three five-minute rounds, there is not a lot of time to duck and shuffle.”

Like wrestling, which is dominated by World Wrestling Entertainment, mixed martial arts is increasingly synonymous with one organization, the Ultimate Fighting Championship. UFC generates millions in revenue on pay-per-view and basic cable.

“People associate the sport with UFC; we have a very strong brand,” said Lorenzo Fertitta, co-owner of UFC parent Zuffa LLC. “No one else has been successful with this except us. There is a long list of tombstones.'

UFC almost ended up in the same graveyard. When it started in the 1990s, there were no gloves, no rounds, no time limits, no weight classes and no rules against head butts, hair-pulling or worse. Forty states banned it, and politicians, most notably Sen. John McCain of Arizona — now the Republican candidate for president — decried UFC as “human cockfighting” and sought to obliterate it.

Perhaps most damaging to potential growth, major cable operators wouldn't even carry fights on pay-per-view.

But the efforts to kill UFC only made it smarter — it imposed regulation after regulation on gloves, weight classes, head butts and so on. By 2001, it was back on pay-per-view. And, most importantly, it was bought by Zuffa, a company owned by Fertitta and his brother Frank, whose family made millions in casinos. A small stake went to fight maven Dana White, the guiding force behind the UFC revival.

BREAKTHROUGH SHOW



Still, the losses kept piling up. The Fertitta brothers had poured in $44 million by 2004 and were ready to walk away from this underground fringe sport when White finally hit upon the solution that would turn everything around. The breakthrough came in the form of a reality show.

“I always felt very strongly that the product would work on television but there was a lot of resistance,” Fertitta said. “Then we had the idea to start with a reality show.”

Ultimate Fighter, which debuted on Spike in 2005, helped introduce viewers to the fighters and the basics of the sport. “Without a doubt, doing a reality show was essential to UFC's success,” said Diamond. “It answered questions for people who didn't know much about mixed martial arts — it showed that these were not just a bunch of lugs. These were skilled athletes.”

A strong first season culminated in the Stephan Bonner-Forrest Griffin fight as the finale, which is, in the MMA world, the equivalent of a great Jack Dempsey or Joe Louis bout.

“It was incredible,” Diamond said. “It is still considered one of great fights and it served as a launching pad.”

By 2007, UFC was, according to Forbes, generating about $250 million and about 90 percent of all mixed-martial-arts revenue. In that year, it had 5.1 million pay-per-view buys in 11 fights, essentially matching 5.2 million in 15 for the WWE. And Fertittta says the picture remains rosy: “We had double-digit growth this year in a terrible economy.”

According to Fertitta, Zuffa had an advantage over other MMA promoters because they were there first and established a strong brand in UFC. But he attributes its success to a combination of factors.

“You can't point to one thing that [differentiates] us,” he said, citing production values, including graphics, music, pacing and announcers, and the look and feel for the live audiences, with bands performing and high-quality fights from the undercard to the main event. “We've created a fast-paced, edgy show,” he said, adding that he and White have a good insight into the young adult male demographic because “we are the two most immature 39-year-olds on the planet.”

While the UFC has flourished, the rest of the MMA world has faced many of the problems that have dogged boxing, with a motley assortment of promoters bleeding money, postponing fights and going under. Organizations like Pride, the International Fight League, King of the Cage and numerous others have folded or been bought up by competitors.

The biggest success story is World Extreme Cagefighting, because that promotion was snatched up by Zuffa — it now has a home on Versus and is building its brand in the lighter weight classes.

Sports and outdoor-programming network Versus was looking to get into the burgeoning category and knew exactly with whom it wanted to partner.

“Zuffa is the gold standard, the NFL of MMA,” said Versus senior vice president of marketing Bill Bergofin. “They understand what they have as entertainment and recognize the value of the whole experience from top to bottom, from the time they come on the air till they go off.”

That's a stark contrast with boxing, said Fertitta, which rarely stacked its fight cards and whose television productions seem straight out of the 1980s.

BOXING STRONG



But boxing's numbers remain strong, said HBO Pay-Per-View senior vice president Mark Taffet.

“The landscape continues to look bright,” he said, adding that HBO's pay-per-view boxing set records in 2006 and 2007 with 2008 proceeding apace, while the traditional network's live events are also faring well. (Boxing tends to draw an older demographic than MMA.)

“There is room for everyone,” said Taffet. “It's good for pay-per-view — mixed martial arts has just added more consumers to the television set.”

Bergofin agrees that a rising tide can lift all boats, saying that interest in MMA on his network may also stir interest in boxing — the network just signed a deal with reality show impresario Mark Burnett for the boxing show The Contender. (The network will also run a version of The Contender focused on a single-discipline martial art, Muay Thai, to try and cash in on interest in all things fight-related.)

FOLLOWING WWE



Much of what UFC is doing with MMA has been done before, said WWE executive vice president Geoff Rochester.

“We think they've borrowed from us — all the pyrotechnics, the high-energy music are things we brought in years ago,” he said. “They adopted our production techniques.”

WWE, formerly the World Wrestling Federation, still attracts 5.15 million viewers (including 1.37 million aged 18 to 34) to its Monday Night Raw on USA Network.

Rochester also says the surface similarities between wrestling and MMA are misleading, and not just because MMA is a real sport and wrestling is “entertainment, with the goal of making you laugh, cry and giggle.”

Rochester also says WWE's demos are much broader, attracting both older and younger viewers (they just launched a kids' magazine) and the company is more layered with books, DVDs and theatrical releases complementing the live and televised events.

WWE views movies and television shows as its main competition, according to Rochester. But with respect to UFC, he said, “We watch each other, make no mistake.”

UFC doesn't seem to worry much about the other companies in the MMA field, and Fertitta pulls no punches about the competition. “No one has ever been successful except us,” he said. “There is no No. 2.”

Diamond is more diplomatic, crediting the next-largest organization, Pro Elite XC with “starting out doing the right thing.” And some early attendance and ratings figures were impressive. But he believes only White and company have the “passion and tenacity” to deal with every aspect of MMA “for 36 hours a day.”

Pro Elite XC expanded rapidly — it debuted on 2007 and then bought up King of the Cage, Icon Sport and Britain's Cage Rage Championships and established a partnership with the Japanese organization Dream.

While UFC walked away from potential network deals instead of relinquishing control, Pro Elite — which started its venture in partnership with Showtime — let the parent network, CBS, begin airing events even though the TV product is overseen by the network's entertainment division. (Showtime Sports does the production.)

“It's not being treated seriously as a sport,” Diamond said.

The first fight in the spring stirred a media buzz for Pro Elite but the use of street brawler Kimbo Slice and the questionable refereeing, among other things, generated a fair share of backlash, creating the sense that the event was rushed before MMA was ready for primetime. Subsequent filings revealed that CBS and Showtime paid Pro Elite $900,000 for the show in May but the promoter paid $500,000 in production costs. Showtime and Pro Elite did provide executives for comment. (Pro Elite XC has now also reached a deal with Fox Sports Net for four fights this fall.)

Meanwhile, Spike TV points out that in July, the network drew more men 18-34 for a UFC repeat than CBS — which reaches more households — did for a live Pro Elite XC championship (averaging a 1.5 rating to a 1.0). And in August, Pro Elite announced it was postponing a September event to marshal its remaining resources for other events (at least one of which did not have a full fight card scheduled less than a month ahead of time). That's not surprising considering that the stock value dropped from $15 to $2.75 in the past year. According to financial reports filed this summer, the company needs additional financing to survive the year; but investors may be scared off by the fact that it lost $18 million in the quarter that included the CBS bout.

AFFLICTION IN THE RING



UFC's other supposed rival is Affliction, which started off as a t-shirt company and moved into promoting MMA fights, teaming up with Donald Trump. It also garnered attention for one big fight, televised over the summer on FSN, but it spent a small fortune on fighters and was unable to follow up quickly to capitalize.

Affliction recently postponed its October bout, which ironically was called “Day of Reckoning” until next January (it had reportedly sold under 1,000 tickets), then announced it was partnering with boxing promoter Golden Boy Promotions to deliver a fight bill that featured both boxing and mixed martial arts.

Golden Boy has had a pay-per-view relationship with HBO but so far the pay-cabler has resisted the siren call of these MMA outfits. Affliction recently reached a deal with Mark Cuban's HDNet, which has deep pockets but far less reach than HBO.

There is concern on MMA Web sites and blogs that UFC needs a rival for the good of the sport, especially since a smaller talent pool may keep fighters out of the sport. But Fertitta says there are enough smaller, regional promotions, which can essentially serve as minor leagues for UFC.

“There has to be smaller regional shows, that's how we find talent, who need bouts and experience,” said Fertitta. “We'll encourage and foster those.” He cites the California-based Strikeforce, which buys time on NBC overnights on Saturdays, as a well-run organization “that knows its niche.”

Fertitta views UFC as having advanced well beyond the idea of a niche—the organization now has both Bud Light and Harley-Davidson as sponsors. He and Diamond say its too soon to talk about what might happen when their current deal expires in 2011—but while the possibility of a bidding war looms, each praises the other's company right now. “We have a tremendous relationship,” Fertitta said. “People recognize the two brands together.”

“We have plenty of time to figure it out,” Diamond added. “We work so well together.” (As examples, he says the UFC is quick to provide athletes for interstitials upon request while the network has re-aired an event after a last-minute request from UFC.) While other networks might seek to get involved, Diamond points out that on Spike, the UFC “gets to be the big star.”

And with Ultimate Fighter still sustaining strong ratings in its eighth season, professional training camps becoming more prominent and greater sophistication seen in the training and tactics, Fertitta sees a wide-open future.

“Our opportunity is starting to surpass our initial dreams,” he said. “We are creating a global footprint to make this a truly international sport. It really feels like we're just getting started.”

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