Photo courtesy of UFC
By Thomas Hauser
Today’s video-game culture and increasingly violent movies have spawned a demand for entertainment that offers clearly-visible mayhem.
Meanwhile, boxing is in trouble. Not many sports have a reigning superstar who has won only twice in the past four-and-a-half years and lost three of his last five outings. But that’s Oscar De La Hoya’s recent record.
Put the aforementioned realities together and one has an ideal environment for the rise of mixed martial arts as a sports entertainment phenomenon.
“It’s easier for the average person to identify with MMA than with professional boxing,” Donald Zuckerman (an early MMA entrepreneur) said ten years ago. “There are more than 15,000 martial arts dojos in the United States, and the number of gyms devoted to boxing is diminishing. Every few years, Hollywood produces one boxing movie, but there are dozens of martial arts films annually. Most people have never engaged in a fight with regular boxing rules. But at one time or another, even if it was only on the playground in grade school, virtually everyone has engaged in some form of fighting.”
A decade later, MMA is impacting upon today’s sports culture. Type “Oscar De La Hoya” into Google and you get 1,740,000 hits. Manny Pacquiao brings in 1,180,000. Pound-for-pound king Floyd Mayweather Jr scores 1,080,000.
Now Google the three biggest MMA stars of recent years: Tito Ortiz (761,000 hits), Chuck Liddell (701,000), and Randy Couture (650,000). Compare them with Bernard Hopkins (408,000), Wladimir Klitschko (320,000) and Kelly Pavlik (156,000).
Get the point?
The original concept behind mixed martial arts was to match combatants who practiced different fighting disciplines against one another. How would a karate expert fare against a practitioner of Brazilian jiu-jitsu? What about a kickboxer against a freestyle wrestler? However, those distinctions soon vanished and, in MMA matches today, multiple disciplines are allowed.
The rules of combat have also changed. A dozen years ago, most MMA competitions featured an anything-goes mentality. Tactics such as kicks to the groin, head butts, and pulling hair were legal. Now virtually all MMA bouts conducted in the United States are governed by the Unified Rules of Mixed Martial Arts, which specify thirty-one forbidden acts ranging from eye gouging and kicking the head of a grounded opponent to spitting and using abusive language.
The “playing field” for MMA competition varies from promoter to promoter. Some bouts are contested in a cage; others in a modified boxing ring. Rounds are five minutes in duration with a one-minute rest period in between. Championship bouts are scheduled for five rounds; non-championship contests for three. There are seven weight classes. A fighter can win by submission (when his opponent concedes defeat), technical knockout (the referee stops the contest), a judges’ decision, or disqualification. In truth, once the shock value wears off, a bad MMA match gets boring quickly. But so does bad boxing.
There are times when boxing goes above and beyond sports and contributes to the elevation of society. Joe Louis and Muhammad Ali are examples of that. MMA fits into another category. To its critics, it’s ugly and grotesque. John McCain has railed against it on the floor of the United States Senate, calling it "human cockfighting.”
“In order to be an MMA champion,” says Jerry Izenberg, “you need every skill that’s outlawed on the planet. The very things we pride ourselves on not doing, these people elevate to an art form. I wouldn’t even try to dignify it.”
Emanuel Steward is in accord, saying, “Mixed martial arts is too brutal, too ugly. There’s nothing beautiful about it, like a nice jab in boxing. A few years back, they invited me to watch a UFC event. But with people getting kicked in the head and punched on the ground, I walked out after the third bout. It was sickening.”
Boxing fans also deride a culture that encourages MMA combatants to “tap out” (quit) and note that MMA combatants are knocked down by punches that would never put a professional boxer on the canvas.
In response, MMA adherents acknowledge that there are more broken bones and dislocations in their sport than in boxing. But they say that MMA might actually be morally superior to boxing because there are ways other than seeking to inflict brain damage on an opponent by which a combatant can win.
They also claim that their sport is safer than boxing. The four-ounce open-fingered gloves used in MMA don’t allow for punching with full force. There’s relatively little leverage on punches when combatants are “grounding and pounding.” And even when combatants are standing, they don’t get the same leverage on punches that boxers do.
“The boxing aspect of MMA isn’t the sweet science that you and I grew up with,” explains Ant Evans (senior communiciations manager for UFC’s UK division). “It‘s a more coarse version of boxing. MMA fighters have to throw punches from much further out as they have to maintain a wider distance in order to spot and defend against takedowns and kicks. Plus the traditional boxing stance positions one’s weight on completely the wrong axis to defend against a takedown attempt. The feet have to be spread out a lot more to enable effective takedown defense work.”
Thus, it can be argued that there are fewer catastrophic injuries in MMA than in boxing. The combatants don’t punch as hard. They “tap out” instead of going out on their shield. They take fewer and less-concussive blows to the head in competition and in the gym. And rather than take a beating round after round, an over-matched combatant is quickly “submitted.”
Also, whether or not one likes MMA, it should concede that the combatants are athletes with skills. The sport features disciplines within disciplines. No one can compete successfully unless he (or she) is a capable ground-fighter and can execute finishing holds.
A decade ago, there were two promoters of note in mixed martial arts struggling over pieces of a very small pie. A company called Battlecade promoted “Extreme Fighting,” while Semiphore Communications marketed a brand of MMA called “Ultimate Fighting.”
MMA has grown since then and is now dominated by a single brand. Ultimate Fighting has morphed into UFC and is the industry’s Hertz. There is no Avis. Everyone else is Rent-A-Wreck.
The companies competing with UFC include ProElite, the International Fight League (IFL), World Extreme Cagefighting, Chuck Norris’s World Combat League, Bodog Fight, Spirit XC, Strikeforce, and M1.
ProElite and the IFL are public companies. A look at their finances is instructive. In November 2006, Showtime announced a partnership with ProElite to televise live MMA events through 2009. However, ratings have been mediocre and the most recent Form 10-QSB filed by ProElite Inc with the Securities and Exchange Commission has some interesting numbers. The company lists $30,628,263 in assets for the period ending September 30, 2007. But $12,197,363 of that total is attributed to “goodwill”. ProElite’s filing also reveals an operating loss of $7,345,966 for the three months ending on September 30, 2007, and an operating loss of $19,491,529 for the nine months ending on September 30, 2007. The International Fight League has a contract with Fox SportsNet, but suffered losses of $16,900,000 during the first nine months of this year.
By contrast, UFC (on the surface, at least) appears to be flourishing. The company in its present incarnation is the creation of three men.
Lorenzo and Frank Fertitta are brothers who built Station Casino (a small Las Vegas casino previously owned by their father) into the fifth-largest gaming corporation in the United States. Lorenzo is also a past president of the Nevada Resort Association (the most powerful gaming association in America). In the 1990s, he was one of the Nevada State Athletic Commission members who voted with the majority against legalizing MMA in Nevada. The best guess is that Lorenzo and Frank have a net worth well in excess of one billion dollars between them.
Fast-forward to 2000. Ultimate Fighting was hemorrhaging cash and its owner told Dana White (who represented several MMA fighters) that he wanted to sell the company. White turned to Lorenzo, who had been a classmate in high school. In January 2001, the Fertittas purchased UFC for $2,000,000 and designated White as its president, placing him in charge of day-to-day operations. The Fertittas now own ninety percent of Zuffa LLC (the company that controls UFC). White owns the other ten percent.
During the Fertittas’ first three years with UFC, the company lost an estimated $36,000,000. But Lorenzo was able to navigate the tricky shoals of Nevada politics to gain approval for MMA matches. Other states fell into line. And in 2004, the Fertittas and White hit upon a strategy to gain traction for their venture. They offered Spike TV an enticing package. UFC would pay all production costs for a reality show about MMA fighters who lived together and fought each other in weekly elimination bouts. Spike could have the show without an upfront payment. Ultimate Fighter debuted in 2006 and became the fledgling cable network’s first hit. It was also an extraordinarily effective infomercial for UFC.
UFC was described this year by Time Magazine as “the fastest-growing sports brand in America.” Its goals for the future include becoming “the next NASCAR” and the NFL of its sport. White is the public face of the company and will do almost anything to advance its goals. And while UFC might be just another investment for Frank Fertitta, it has become a way of life for Lorenzo.
UFC follows the WWE (World Wrestling Entertainment) marketing model. Fans are promised lots of action in concentrated bursts from combatants with distinctive personalities. The fights are real, but almost everything that surrounds them is scripted and the television production is tightly controlled. Because UFC is the promoter and de facto sanctioning body and has more than three hundred combatants under contract, it can schedule fights on whatever dates and for whatever titles it wants.
The company offers basically the same product as other MMA groups. But the Fertittas have been willing to spend whatever is necessary to establish and market their brand. Matches have taken place in Nevada, New Jersey, California, Connecticut, Florida, Louisiana, Ohio, and Texas, and also overseas in London, Manchester, and Belfast. In March of this year, UFC purchased Pride (its primary Asian rival) for a reported $70,000,000.
Success sometimes breeds resentment, and UFC has its share of enemies. Rival promoters have grumbled about anti-competitive acts such as the alleged use of financial muscle (e.g. advertising dollars) to discourage media coverage of competitors’ events. They also claim that UFC marketing includes papering the house for promotions and giving cash to buyers who go to stores and purchase multiple copies of UFC DVDs. One competitor expresses his feelings with the observation, “You can’t spell ‘fuck’ without a U, an F, and a C.”
But when Chuck Liddell battled Quinton Jackson at the MGM Grand on May 26, 2007, UFC was able to boast of a sell-out with a live gate of $4,400,000. And while pay-per-view has put a damper on boxing’s popularity, UFC seems to be thriving on it.
UFC promotes twelve to fourteen shows annually, all of them on pay-per-view. According to SNL Kagan (a media research company), UFC events in 2006 grossed $205,000,000 in pay-per-view revenue compared to $177,000,000 for HBO-PPV and $200,000,000 for WWE.
So far, the only big revenue streams for UFC have been ticket sales and pay-per-view. The sponsors have been low-end. The company came close to breaking new ground earlier this year when it reached an agreement in principle with HBO to televise three shows with an option in the network’s favor for three more. The deal was negotiated at the insistence of HBO chairman Chris Albrecht, who was seeking to attract a younger viewing demographic. HBO Sports president Ross Greenburg resisted the move. So did Sheila Nevins (the head of HBO’s documentary division), who has been with the network since 1979. Nevins made an impassioned plea against UFC programming, telling Albrecht that UFC didn’t “feel like HBO” and that, as a premium cable channel, the network didn’t have to be ruled by ratings as a way of enticing advertisers.
But Albrecht held firm. On April 18th, Dana White announced that the deal was done. "It’s been a long hard process,” White told the Los Angeles Times. “But I’m very comfortable with where we are.”
White said that the first telecast would take place during the summer. An HBO spokesperson told the Times that the network would select a commentating team with experience in mixed martial arts and that its regular boxing commentators were not under consideration for the job.
Then fate intervened. In the early morning hours of Sunday, May 6th (following the megafight between Oscar De La Hoya and Floyd Mayweather Jr), Albrecht was arrested in the valet parking area of the MGM Grand for assaulting his 37-year-old girlfriend, Karla Jensen. According to the police report, Albrecht grabbed Jensen by the throat with both hands and was dragging her toward the hotel, when police forced him to release his grip and put him in a submission hold. Five days later, the HBO chairman pled no contest to a charge of misdemeanor battery. Under the terms of a plea-bargain agreement, he was given a six-month suspended sentence, fined $1,000, put on unsupervised probation for one year, and required to undergo domestic violence counseling. On May 9th, he resigned from HBO, when the Los Angeles Times reported that Time Warner (the network’s parent company) had previously paid $400,000 to a woman named Sasha Emerson (Albrecht’s subordinate at work and a former lover) who had accused him of choking her.
Without Albrecht running interference, the UFC-HBO agreement went down the drain over issues that revolved around the extent to which HBO would control the television production of the UFC shows it aired. Subsequent negotiations between UFC and ESPN also failed. Discussions between UFC and CBS are now in progress.
The Fertittas and Dana White deserve credit for building an industry. They have completely restructured MMA and turned their share of it into a highly-organized tightly-controlled business. But it has to be remembered that UFC is just a promoter. A big promoter, a successful promoter; but one promoter. That’s all. UFC champions are, in essence, nothing more than “Top Rank champions” or “Golden Boy champions.” And that’s all they can be because combatants under contract to UFC aren’t allowed to fight combatants controlled by other corporate entities.
As for the future; MMA is currently sanctioned (or has been approved by the legislature with sanction pending) in 32 states plus the District of Columbia. The most important jurisdiction not yet in the mix is New York, which has a statute that specifically bans mixed martial arts competition. To overturn the ban, the State Assembly and State Senate must pass new legislation and the governor must sign it. Toward that end, UFC has hired lobbyists to press its case. Cablevision (which owns Madison Square Garden and is the fifth-largest cable provider in the United States) is also pushing for legalization.
Another key player is Marc Ratner, who served for fourteen years as executive director of the Nevada State Athletic Commission. In May 2006, Ratner left the NSAC to become UFC’s vice president for regulatory affairs. His primary objective for 2008 is to get MMA legalized in New York. “We’re the lead driver,” he says. “The other organizations are just drafting on us.”
Ratner acknowledges that “UFC is not for everybody.” When asked how MMA stacks up against boxing, he refuses to compare the two sports. But inevitably, discussions about MMA turn to its impact upon the sweet science.
UFC has a marketing line: “Boxing is your grandfather’s sport.” But research shows that only about twenty percent of those who attend UFC events have ever been to a boxing match, and these people tend to return to boxing. On the other hand, there’s a progression from pro wrestling to the UFC that occurs when a wrestling fan is around age eighteen. If boxing could get these fans to attend a boxing match, they might like it.
But boxing keeps screwing up. It has multiple “champions” in almost every weight division. Corrupt and incompetent ring judges render decisions that alienate fans. The NFL doesn’t ask for special praise when it matches the AFC and NFC champions in the Super Bowl. But boxing pats itself on the back whenever it gives fans a fight that the fans want to see. And when a big fight comes, it’s usually paired with a non-competitive undercard for $44.95 or more.
HBO (which televises virtually all of boxing’s major pay-per-view fights) says its studies show that undercards have little effect on PPV buys. Maybe that’s because fans have been conditioned to expect lousy pay-per-view undercards. That’s a great way to build a fan base: “You, the buying public, don’t care what’s on the undercard, so we’re going to save money and show you boring one-sided fights.”
MMA and the UFC don’t pose a longterm threat to boxing. Boxing poses a longterm threat to boxing. If the UFC didn’t exist, boxing would have the same problems that it has today.
Here, a comparison between UFC and HBO is instructive. UFC is the 800-pound gorilla in MMA. HBO is the 800-pound gorilla in boxing. Each company has an aura about it and a huge amount of money to spend.
There was a time when HBO was the closest thing that boxing had to a competent governing body. It was the driving force behind building fighters like Mike Tyson, Oscar De La Hoya, Roy Jones, Shane Mosley, and Arturo Gatti. More recently, it has enabled Golden Boy to evolve into one of the two most powerful promoters in boxing and fueled Al Haymon’s managerial empire. Pro football players don’t thank CBS and Fox for putting them on television. Pro basketball players don’t thank NBC or TNT. But fighters always thank HBO. That makes it clear who dictates the schedule in boxing and where the power lies.
But HBO has been squandering its brand appeal. Once, fans would watch a fight simply because it was on HBO. Not anymore.
HBO is trumpeting the fact that 2007 has seen a year of record-high pay-per-view buys. But it has also been a year of record-low HBO World Championship Boxing ratings. Moreover, there has been little correlation between the license fees that HBO pays for fights and the ratings they get.
By way of example; the network poured a $3,000,000 license fee plus another seven figures for marketing and production into Joe Calzaghe versus Mikkel Kessler, which garnered a 2.8 rating (the lowest prime-time HBO World Championship Boxing rating ever). But that shouldn’t have surprised anyone. The live afternoon telecast of Calzaghe against Peter Manfredo earlier in the year came in at 1.4. And the live afternoon telecasts of three Wladimir Klitschko fights held in Germany scored 2.4 (against Chris Byrd), 1.5 (against Ray Austin), and 1.7 (versus Lamon Brewster). Paulie Malignaggi did better ratings than that for a small fraction of the cost twice this year on Boxing After Dark.
It now appears as though HBO’s first two shows in 2008 will be a delayed-tape telecast from Germany of Alexander Povetkin against Eddie Chambers on January 26th and a triple-header from St. Lucia on February 2nd. That’s a good way to boost American boxing. Start the year with shows from Berlin and the Caribbean; the first one featuring a Russian heavyweight. One hopes that the second card (featuring Paul Williams, Chris Arreola and Andre Ward) doesn’t consist of mismatches.
But there’s another factor at work in the interplay between boxing and MMA. Years ago, boxing championed the advance of home television and closed-circuit TV. HBO, in particular, was an early leader in the marketing of pay-per-view. But boxing has lagged behind MMA when it comes to exploitation of the Internet.
At one point, the mainstream media wouldn’t touch MMA, so it survived (and still does to a great degree) on publicity from cyberspace. Meanwhile, in recent years, some powers in boxing have looked down their nose at the Internet. One HBO Sports executive even proclaimed that he wouldn’t return telephone calls from Internet writers. That type of arrogance is counterproductive for a lot of reasons, including the fact that the Internet attracts precisely the “young” demographic that HBO is trying to reach.
UFC is already in negotiations with Yahoo to distribute its matches over the Internet on a pay-per-view basis. Eventually, pay-per-view boxing will move to the Internet in a significant way. But when it gets there, it will find that MMA has beaten it to the punch. And the danger for HBO is that, if it doesn’t change quickly, its boxing program (and much more) could be eclipsed by new technologies the same way that IBM was eclipsed by Microsoft.
HBO is important to boxing. Every time the network shoots itself in the foot, boxing bleeds. And too often lately, its aim has been off the mark.
November 17th offered a study in contrasts. That night, UFC promoted a nine-bout card at the Prudential Center in Newark, while HBO televised a Boxing After Dark card from Atlantic City.
The arena in Newark was already half-full at 8:15 pm when the first UFC bout began. Unlike boxing crowds, UFC fans tend to arrive early. That’s because there isn’t a red corner with all the winners in it and a blue corner with all the losers. UFC tries to avoid mismatches at every level.
A significant number of boxing writers were at the Prudential Center. The fights were contested in The Octagon; an octagonal cage thirty feet in diameter enclosed within a chain-link fence that rose 69 inches above the canvas. Before each match, a short video introducing the combatants was played for the crowd. Fighters high-fived fans on the way to the ring. When the combatants were locked together in combat on the mat, the crowd watched the action on one of six large overhead screens. After each contest, the winner was interviewed over the public address system. There were no long delays between bouts.
At 10:00 pm, after four preliminary contests, the pay-per-view portion of the card began. The arena was full. MMA, like NASCAR, is a predominantly “white” sport. Most UFC combatants are white with little or no hair on their head and a lot of tattoos. The crowd mirrored that demographic. It was overwhelmingly white with a sprinkling of Asians thrown in. With few exceptions, the only black faces were those of ushers and security personal.
Just before the first televised bout, a UFC highlight reel was shown on the screens above. This is part of “the UFC experience.” Fans await it with the same anticipation that precedes Michael Buffer’s “let’s get ready to rumble.” During the course of the evening, there were four technical knockouts (bouts stopped by the referee) and two tap-outs. Three contests, including the main event, went to a decision. The UFC brand (not the individual fighters) was the star of the show. The announced crowd of 14,071 paid a live gate of $2,100,000.
HBO’s telecast that same night began with a tape of Miguel Cotto versus Shane Mosley (which had been contested one week earlier). The two bouts televised live thereafter featured four foreign nationals. Abner Mares (from Mexico) met Damian Marchiano (Argentina) in a fight that figured to be a mismatch and lived down to expectations. Mares won an easy decision. Then, for viewers who were still awake (and there weren’t many on the east coast since the telecast ended close to 1:00 am), Joan Guzman (from the Dominican Republic) decisioned Humberto Soto (Mexico).
But there are other comparisons that should be made between mixed martial arts and boxing. Like the sweet science, MMA is plagued by conflicts of interest and inconsistent governmental regulation.
Fighter safety is also an issue. In many jurisdictions, there are virtually no barriers to entry, and state legislatures have been lobbied in a way has opened the floodgates to all manner of MMA toughman contests.
An increasing number of MMA combatants are now being seriously trained in the art of throwing punches on the theory that one good whack to the head can end a fight. As they grow more proficient, the number of head injuries will rise and regulators will be forced to reconsider the wisdom of requiring 140-pound boxers to wear ten-ounce gloves while 250-pound MMA combatants compete with four ounces of leather on either hand.
Illegal drugs are another problem. In most instances, drug testing is conducted by the state athletic commission that oversees a given competition, which means that, generally, there’s minimal testing or no testing at all. Mixed martial arts has been described by detractors as “boxing on steroids.” When steroid testing has occurred prior to MMA cards, the results have often been troubling.
And inevitably, there will be deaths. That’s inherent in the nature of the sport. Recently, an MMA fighter named Sam Vasquez spent six weeks in a Texas hospital, where he was listed in critical condition and put in a medically-induced coma. Two blood clots had formed in his brain and he suffered a massive stroke after being knocked out in a Renegades Extreme Fighting event in Houston on October 20th. He died on November 30th.
Sooner or later, UFC will experience a similar tragedy. Indeed, there’s a school of thought that, while professional wrestling controls the production of its telecasts so fans will forget that wrestling is fake, UFC controls its telecasts so fans will lose sight of the true nature of the physical damage being done. UFC’s cameras rarely linger on a combatant who is bleeding profusely or lying unconscious on the octagonal matt.
Moreover, there’s an undercurrent of concern in the MMA industry that the audience is a UFC audience, not an MMA audience; that the audience is finite; that familiarity will breed boredom; that MMA is a bubble and, with everyone jumping onto the bubble, it will burst.
There are even those who think that UFC is starting to lose traction; that the emperor has clothes but the fabric is tearing.
More managers and agents are coming into the MMA business, which means less profit for promoters. Randy Couture is nearing the end of his career. Chuck Liddell has lost his last two fights. Tito Ortiz hasn’t held a belt in four years. Few, if any, mainstream sponsors want their logo on a ring canvas that’s splattered with blood.
And perhaps most significantly, on November 27th, Standard and Poor’s downgraded its credit rating for Zuffa LLC (the company that controls UFC) for the second time this year. The cut was the result of a weaker-than-expected corporate performance in the third quarter of 2007; the second consecutive quarter in which S&P found Zuffa’s performance to be significantly below expectations. Zuffa’s credit rating is now BB-minus. The rating affects $350,000,000 in secured financing.
Debt that is rated Triple-B and higher is considered “investment quality.” BB-minus debt fits into the category that is politely termed “high yield.” In an earlier era, BB-minus bonds were known as “junk bonds”.
There’s also an issue regarding the skill level of MMA combatants. Backers of the sport are fond of saying that their top competitors would beat Floyd Mayweather Jr and any other elite boxer in a mixed martial arts competition. But that misses the point.
Any professional golfer would beat Mayweather on the golf course. Any decent high school tennis player would outclass Bernard Hopkins at tennis. A beginning sumo wrestler would belly-bump an MMA competitor out of the ring if they were adhering to the rules of sumo-wrestling. And a marginally competent club fighter would destroy an MMA competitor in a boxing match. These hypothetical match-ups involve competitors from different sports.
Today’s elite boxers are the best in the world at what they do. UFC claims that it has the best mixed martial artists on the planet, but that has yet to be proven. Boxing fans still care about who’s really the best in their sport, while there’s a feeling that MMA champions are fungible.
How good are today’s MMA combatants? At the close of HBO’s telecast of Oscar De La Hoya versus Floyd Mayweather Jr, Jim Lampley declared, "There’s nothing in mixed martial arts within light years of what Mayweather and De La Hoya are able to do with their hands.” That view is shared by most boxing people, who believe that MMA is an inferior product which, although packaged and marketed effectively, is simply not as good as boxing.
“UFC ain’t nothing new,” says Don King. “They started with ultimate fighting and then they civilized it and made it into boxing. All UFC is doing is taking two hundred years of rules and throwing them out the window.”
Or to phrase things differently: What would happen if Bob Arum went to the Nevada State Athletic Commission and proposed boxing with a twist? To build interest in the February 16th rematch between Kelly Pavlik and Jermain Taylor, there would be a slight change in the rules. If one of the fighters knocked his opponent down, he could punch him in the head and kick him as he lay on the canvas.
Thomas Hauser can be reached by email at email@example.com