Expert Article

Billion-Dollar Bloodbath

A deep-dive into the history of the Ultimate Fighting Championship

In a dimly lit room, people sit staring to the bright cage in the middle. Inside, the opponents are chirping at each other from opposite corners. The audience yells and is putting down bets on which one of these animals they think is going to win. You’re probably asking yourself, is this article really about cockfighting? Almost. 

Cage fighting has long been seen as a platform for savagery and deathly matches. No one ever thought this could become a billion-dollar industry that now competes with major league sports in the United States. The Ultimate Fighting Championship, or UFC, has come a long way from the all-out, no rules, barbaric fighting establishment it once was. Today, it is indisputably the largest promotion for professional Mixed Martial Arts (MMA) fighting. But since its turbulent inception, the UFC has fended off its fair share of adversity to reach the top of the MMA kingdom.

Humble Beginnings

As with any business, the UFC has always been about making money. It needs capital to survive and can only be sustained if it sells. But the originator of the idea had a deeper purpose as well. Rorion Gracie, largely considered a pioneer of MMA, had the idea to globalize the sport and make it well known. And with the financial backing of several financial partners, the UFC was born (Segal).

Unfortunately, neither of the founders were able to see their dreams come to fruition. The organization never took off under Gracie and his partners. The strategy was doomed from the start. They built a “reputation for unchecked aggression” (Segal) and were condemned for it. The sport would never be popular when marketed as an “everything goes” or “fight to the death” event. The UFC was at the brink of irrelevance. They were losing money quickly and had no strategies for growth. In fighting terms, you could say Gracie and his partners were about to tap out.

Enter Frank and Lorenzo Fertitta. The brothers grew up in Las Vegas in a family known for their casino chain, Station Casinos. Growing up in the fight capital of the world, both were instilled with a love for boxing at a young age. The avid investors wanted to enter the fighting business and saw the UFC as the perfect opportunity. They bought the company for pennies on the dollar at a sum of $2 million. It would be a challenge to grow this company after the very tarnished reputation it had already built. The brothers created Zuffa, a company to run the UFC. Zuffa, the Italian word for “fight,” was quite fitting coming from a classic Italian family and also for the struggles they would face ahead.

Early Struggles

Much like the initial version of the organization, the UFC was not successful out of the gates. The first issue was the branding the organization had created before the sale. The three letters by which the promotion was known were synonymous to a dangerous style of fighting with no rules. Imagine Fight Club and a bloodied up Brad Pitt in a fight to the death. This was not the image that the Fertitta’s wanted their company associated with. The company underwent an immense amount of re-branding and re-structuring efforts in order to align itself with an image more similar to what American major league sports boast; a regulated, televised, and star-studded competition.

In the first couple of years, the Fertitta’s lost nearly $10 million a year (Merced). Not enough people were tuning in to watch the fights. Then there was the broadcasting fiasco that the Fertitta’s remember to this day. The Pay-Per-View event was running long and they had not bought enough broadcasting time in order to finish the event. Fans watching on TV were stopped in their tracks when the the event cut out in the middle of the main event. The UFC rebounded by starting The Ultimate Fighter (TUF). TUF is a competition that recruits top mixed martial artists from across the globe to compete for a contract with the promotion. The competition was an instant success with fans globally.

It wasn’t all uphill from there however. The UFC was also on the tail-end from much scrutiny due to health concerns of their fighters. Much like boxing and football – both contact heavy sports – head trauma was a concern. Being such a new sport, the true effects of MMA and its activities in the UFC are yet to be fully documented. Nevertheless, UFC president Dana White claims “this thing is safe,” adding that “there’s never been a death or serious injury in the 20-year history of UFC” (Wall Street Journal).

The Boom

After the UFC turned their performance around they have seen a fast rise in popularity. It is now the fastest growing sport in the world and has built a hardcore fan base. The promotion estimates that 30 to 40 million people tune in to watch their biggest pay-per-view events. For reference, that blows away the audience for any of the 2015 N.B.A. finals (Segal). A lot of the success of the company can be attributed to superstars that they have created. Connor McGregor and Ronda Rousey – two of the most popular in the UFC – have become household names across the globe. These two have seen a meteoric rise in fame and draw an immense amount of attention to the company. Even those who are not fans of combat sports now want to tune in to watch their fights.

Recently, the UFC was acquired by WME-IMG for approximately $4 billion. WME-IMG is a talent agency lead by Patrick Whitesell and Ari Emanuel, a close friend of the Fertitta family. The private equity funds involved in the deal were KKR, Silverlake, and MSD Capital (Merced). The sale represents a return of approximately $800 million for each of the brothers who took the brand to the next level (Kirsch).

After the sale, the UFC caught even more attention. No one can deny that it has become a powerhouse in the sports industry, no matter what way you cut it. The small company that started with a Brazilian dream is now a global behemoth. Even though Gracie was not the one to do it, his dream still became reality.   

For your viewing pleasure... Here is my favorite knockout in the UFC. A spinning back kick by Uriah Hall on season 17 of The Ultimate Fighter (WARNING: Very violent content).

References:

Kirsch, Noah. “The Fertitta Brothers Just Made 2,000x Their Initial Investment in UFC.” Forbes. Forbes, 11 July 2016. Web. 18 Sept. 2016

Merced, Michael J. De La. "U.F.C. Sells Itself for $4 Billion." The New York Times. The New York Times, 10 July 2016. Web. 18 Sept. 2016.

Segal, David. "Fighting a Cage Match to Turn UFC Into a National Phenomenon." The New York Times. The New York Times, 26 March 2016. Web. 18 Sept. 2016.

"UFC is Facing its Ultimate Fight." Wall Street Journal. 11 Nov 2010. ProQuest. 18 Sept. 2016